Open Demo Account

Before you open a live account with Straighthold Investment Group, we insist that you open a demo account beforehand. A demo account will enable you to test yourself in real Forex market conditions, to experience the trading platform possibilities, to try out your trading system without financial risk and to evaluate the Straighthold Investment Group operations and the LiteForex project.

A demo account does not differ from a live one except for the fact that you take no risks while trading, since you do not need a deposit on this account.

When you open a demo account you personally indicate the amount of your "virtual" deposit. But we strongly recommend that you indicate the particular amount you wish to credit your future live account.

Kindly remember that all trading and financial operations on the LiteForex project Lite group accounts are executed in cents (1/100 US dollar). So, you need to indicate the desired "virtual" deposit in cents.

To open a demo account you need to do the following:

download and install our trading terminal;

When you start the terminal up for the first time, you will be asked to fill out a registration form to open the demo account. Please, fill it out with your personal data, then choose a leverage size and indicate an amount for the desired "virtual" deposit, then press NEXT>. Next you will be asked to choose a trading server from the server list. You’ll need to select the server with the address SIG-Demo.com, then click NEXT>.

To be sure that your terminal is able to connect to a server, we recommended that you press SCAN before you choose a server.

After your successful registration, a demo account will be opened and you will see its number and two passwords: one for trader and for investor (without the possibility of trading). Please, remember this information and click on FINISH.

Your new account will appear in the NAVIGATOR window; your terminal will automatically connect to a trading server.

Within several seconds after you have opened a simulated account and connected to a server, you will receive notification of a new account and information about how to access it on your terminal, via internal e-mail.

You can change the language of the program interface. Enter VIEW->Languages and choose your language from the list. Close the program and restart it.

Trading Platform

Straighthold Investment Group, Inc. offers its clients the most popular and powerful platform - SIGTrader 4 Forex trading system - developed by MetaQuotes Software Corporation. The client terminal SIGTrader 4 is an online Forex trading broker system intended for online trading and technical analyses on the Forex, CFD and Futures markets. Some types of installed orders let you manage your trading activity flexibly.

Beside a number of technical indicators and online instruments, this Forex trading system terminal is also equipped with MetaQuotes Language 4, a customized language for trading strategy programming. This language will help you to develop Advisers and Expert Advisors - mechanical Forex trading system, Custom Indicators and Scripts. Advisers analyze the current market situation online and take decisions, place trading orders and open positions without trader participation. Custom and technical indicators can analyze market conditions and generate different signals. And Scripts are intended for one-time executed actions.

For clients who wish to remain online continuously, MetaQuotes Software Corporation has created the SIGTrader 4 Mobile terminal for Windows CE Pocket Computers. This terminal is used by Straighthold Investment Group, Inc clients free of charge and provides almost full functionality for PCs, including dozens of the most popular Forex trading system indicators, internal email, and the possibility to get news online and to complete all types of trading operations.

The smart phone version of the MetaTrader terminal - SIGTrader Smartphone Edition - is another option for mobile access to the trading terminal. It is almost as functional as the Palm version and makes you mobile anywhere, even if your normal computer or Palm are not available.

A Multyterminal is offereed by Straighthold Investment Group to those traders who work with more than one account simultaneously. Being void of the technical analysis function this terminal greatly facilitates analysis of multiple accounts making it possible for the trader to be connected to all accounts at the same time.

The main multiterminal field of application is the field of trustful management which presupposes trading operations on several accounts.

Getting Started

The first step to successful Forex trading lies in understanding the Forex market structure with its advantages and disadvantages, appreciating its reefs, studying analysis methods, market predicting and trading principles and creating personal Forex trading strategies.

A brief excursus into the Foreign Exchange market - Forex, as well as a description of trading principles, analysis and predicting methods can be found on our site, in the pages: Introduction to Forex, Understanding Forex, Forex Techniques, Forex Glossary, Forex Trading FAQ. Unfortunately, the information you find on our site is only a small portion of the vast volume of information available nowadays. But this information will help you get started.

The second step is implementing the acquired knowledge in practice - studying and using the Forex trading platform, placing, deleting and modifying orders, opening and closing positions and so on.

At this stage you need to practice on a Forex Demo Account. A demo account lets you develop your skills without financial risk as you do not need to invest. Demo accounts are free. Instructions for opening Forex demo accounts can be found on the page "Open Demo Account".

After the first positive results, many traders enter the real Forex market and do not succeed. That's why you need to get positive results that are stable first. The knowledge you gain, through correct trading with your own system, following your rules, developing steel logic and psychological stability, in absence of greed and following a money management system will all be determinant at this stage.

To assist new traders in accomplishing this difficult task, our company has prepared two special types of accounts - MINILIte and 100KLite.

MINILite accounts offer Forex beginners the possibility of starting real trading on Forex with real deposits. But keep in mind that profits and losses on this account will be minimal. Even stable profits cannot cover your Internet expenses.

A small starting deposit, which any Forex trader could lose absolutely painlessly, will help you overcome the very complex transitional stage of going from a demo account to a live account.

Since all Lite group accounts are in cents, Forex traders will practice working with amounts that have more and more zeros, like in US dollars. This helps prepare traders for the future and escape psychological pressure when trading on professional accounts.

Moreover, the MINILite Forex account can be used by skilled Forex traders for testing different mechanical trading systems

100KLite type accounts are the next step for Forex beginners. While trading on this account, traders learn how to achieve profit plans, and reduce risks.

After completing the above three stages - from a simulated account to a 100KLite account - you can decide whether you are ready for successful trading on the Forex market or not, and finally choose a professional level account - MINIForex or 100KForex, depending on your financial possibilities and interests.

Forex Trading F&Q

Forex and Currency Trading FAQ

What is currency trading?
Each country has its own currency. Currency trading occurs when one country's currency is traded for another country's currency at the prevailing exchange rate.
How does currency trading work?
All currency is traded in LOTS. Each lot has a different amount of currency. For example, a Swiss Franc lot has 125,000 Swiss Francs in it. A trader opens a margin account, enabling him the right to trade it.
What is a margin account?
A margin account is a bond account. Before you start currency trading, you need to place a certain amount into it to guarantee other traders you can pay them if you lose. This account is monitored by your broker and he will not allow you to risk more than you have. When you win/lose it's a place to deposit/withdraw the money.
How is money made on currency trading?
Currency trading is carried out on a point (or pip) system. Traders are trying to capture points. Depending on the currency, each point is worth a different amount. For example, the British Pound is worth about $10 per point that is traded per lot. If you trade 1 lot and capture 40 points, you make $400. 10 lots and 40 points bring $4,000.00, etc.
What is the difference between Futures and Forex currency trading?
Futures currency trading is done in trading pits, where you are trading currencies today, but for future prices. Forex currency trading is trading actual currencies at today's exchange rate with banks.
Am I buying actual currencies when I trade?
No. With your margin account, you are buying the right to trade one "lot" of a currency. Each lot equals a different amount of currency, depending on the currency being traded versus the US dollar.
What is Day Trading?
Day Trading is when a trader buys and sells his lots or stocks that same day. He is in and out of the currency trading market that same day and does not hold his position any longer.
What percent of people really earn money on the Forex currency trading?
10 % make money and 90% lose money on currency trading! Why? Those, who enter the currency trading market driven by greed and fear, lack a sound equity management plan and know very little about the techniques of currency trading.
Why do Professional Traders earn so much money on currency trading?
Those 10% earning money on currency trading receive the money lost by 90%. Most Professional Traders are part of the 10% earning money.
Can I become a successful Professional Trader?
Absolutely! Currency trading is a profession that most anyone can learn. However, it doesn't happen overnight or in a few weeks. You must go through the processes of education and mentoring, just like all professionals did.
Is currency trading a form of gambling?
Currency trading professionals seek price fluctuations and investors seek return on investment. Both take a calculated risk that is minimized by knowledge. Currency trading turns into gambling when you are uneducated, trade emotionally or with a "hot tip".
Can I lose everything on currency trading with the Forex?
No, you can't. The under-educated are likely to lose their margin account, the educated ones have a fair chance of capturing the loser's money.
Why don't we hear more about the Forex?
Reliable sources indicate that the volume of currency trading on the Forex is about 1.5 trillion. The major part of this money is generated by major investors, banks, financial institutions and governments. Today due to the Internet, more and more people discover the opportunities and get involved in currency trading.
How can I get started with currency trading?
There are growing numbers of international firms offering various approaches to Forex currency trading. In currency trading you need to be very careful and exercise due diligence, so check references. Find a company that doesn't promise the moon. Phenomenal returns are the exception, not the rule! Reputable firms have credentials. Beware of "Black Box" systems. It is against FTC regulations to offer any guarantee of performance of any system. What one can guarantee is that their currency trading methodology is sound, productive and profitable. Currency trading decisions should not be made by computer only. A professional trader is a human being who uses his brain and intuition to interpret the computer-generated information. Education and discipline are also essential for developing a good currency trading methodology.
What is good judgment trading?
Good judgment trading is the exact opposite of a Black Box System. It's a complete understanding of the currency trading market and its constantly changing environment. It is a clear currency trading methodology that utilizes high probabilities.
How much money can I make on currency trading?
If you get involved with the right company offering proper education and mentoring in currency trading, you can expect to create a financial performance expectation plan. A lot depends on how much you start out with, how knowledgeable and composed you are. Never enter the currency trading market without prior paper trading, which is trading pretend money. Once you achieve a track record of successful trades then you may enter the market with your own money.
What do emotions have to do with currency trading?
Where money is involved so are emotions. Many people are quite knowledgeable about currency trading, but can't handle the emotions. Emotions are the biggest obstacle to successful currency trading. You have to rely on logic to succeed.
Are there any self-education books on currency trading?
Hundreds of books on currency trading are available on this site and we encourage you to read. However, there's no "how to - step by step" book on how to become a millionaire overnight. Successful currency trading is a painstaking process, not a miracle.
What can Market Traders Institute do for me?
You will begin a personal involvement with a reputable firm and successful professional traders. We will teach you all the processes, provide you with personal continuing support, research and education. We offer advanced currency trading courses as you progress. If they don't meet your expectations we'll give your money back.
Deposit and withdrawal regulation.
Please, pay attention to the fact that there are special rules for depositing and withdrawing money with our company. The main aim is decreased risk in deposit/withdrawal operations. You should use the same method for both depositing and withdrawing. The one exception is a wire transfer. If you deposit money via a wire transfer, you may withdraw money via a wire transfer as well as via electronic transfers (except Moneybookers). The opposite is not possible: i.e. if you deposit money via an electronic payment system you can't withdraw via a wire transfer.

Forex Glossary

A
Accrual - The apportionment of premiums and discounts on forward exchange transactions that relate directly to deposit swap (Interest Arbitrage) deals , over the period of each deal. Adjustment - Official action normally by either change in the internal economic policies to correct a payment imbalance or in the official currency rate or. Adjustment - Official action normally by either change in the internal economic policies to correct a payment imbalance or in the official currency rate or. Appreciation - A currency is said to 'appreciate' when it strengthens in price in response to market demand. Arbitrage - The purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market, in order to take advantage of small price differentials between markets. Ask (Offer) Price - The price at which the market is prepared to sell a specific Currency in a Foreign Exchange Contract or Cross Currency Contract. At this price, the trader can buy the base currency. In the quotation, it is shown on the right side of the quotation. For example, in the quote USD/CHF 1.2627/32, the ask price is 1.2632; meaning you can buy one US dollar for 1.2632 Swiss francs. At Best - An instruction given to a dealer to buy or sell at the best rate that can be obtained. At or Better - An order to deal at a specific rate or better.
B
Balance of Trade - The value of a country's exports minus its imports. Bar Chart - A type of chart which consists of four significant points: the high and the low prices, which form the vertical bar, the opening price, which is marked with a little horizontal line to the left of the bar, and the closing price, which is marked with a little horizontal line of the right of the bar. Base Currency - The first currency in a Currency Pair. It shows how much the base currency is worth as measured against the second currency. For example, if the USD/CHF rate equals 1.2615 then one USD is worth CHF 1.2615 In the FX markets, the US Dollar is normally considered the 'base' currency for quotes, meaning that quotes are expressed as a unit of $1 USD per the other currency quoted in the pair. The primary exceptions to this rule are the British Pound, the Euro and the Australian Dollar. Bear Market - A market distinguished by declining prices. Bid Price - The bid is the the price at which the market is prepared to buy a specific Currency in a Foreign Exchange Contract or Cross Currency Contract. At this price, the trader can sell the base currency. It is shown on the left side of the quotation. For example, in the quote USD/CHF 1.2627/32, the bid price is 1.2627; meaning you can sell one US dollar for 1.2627 Swiss francs. Bid/Ask Spread - The difference between the bid and offer price. Big Figure Quote - Dealer expression referring to the first few digits of an exchange rate. These digits are often omitted in dealer quotes.. For example, a USD/JPY rate might be 117.30/117.35, but would be quoted verbally without the first three digits i.e. "30/35". Book - In a professional trading environment, a 'book' is the summary of a trader's or desk's total positions. Broker - An individual or firm that acts as an intermediary, putting together buyers and sellers for a fee or commission. In contrast, a 'dealer' commits capital and takes one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party. Bretton Woods Agreement of 1944 - An agreement that established fixed foreign exchange rates for major currencies, provided for central bank intervention in the currency markets, and pegged the price of gold at US $35 per ounce. The agreement lasted until 1971, when President Nixon overturned the Bretton Woods agreement and established a floating exchange rate for the major currencies. Bull Market - A market distinguished by rising prices. Bundesbank - Germany's Central Bank.
C
Candlestick Chart - A chart that indicates the trading range for the day as well as the opening and closing price. If the open price is higher than the close price, the rectangle between the open and close price is shaded. If the close price is higher than the open price, that area of the chart is not shaded. Cash Market - The market in the actual financial instrument on which a futures or options contract is based. Central Bank - A government or quasi-governmental organization that manages a country's monetary policy. For example, the US central bank is the Federal Reserve, and the German central bank is the Bundesbank. Chartist - An individual who uses charts and graphs and interprets historical data to find trends and predict future movements. Also referred to as Technical Trader. Cleared Funds - Funds that are freely available, sent in to settle a trade. Closed Position - Exposures in Foreign Currencies that no longer exist. The process to close a position is to sell or buy a certain amount of currency to offset an equal amount of the open position. This will 'square' the postion. Clearing - The process of settling a trade. Contagion - The tendency of an economic crisis to spread from one market to another. In 1997, political instability in Indonesia caused high volatility in their domestic currency, the Rupiah. From there, the contagion spread to other Asian emerging currencies, and then to Latin America, and is now referred to as the 'Asian Contagion'. Collaterall - Something given to secure a loan or as a guarantee of performance. Commission - A transaction fee charged by a broker. Confirmation - A document exchanged by counterparts to a transaction that states the terms of said transaction. Contract - The standard unit of trading. Counter Currency - The second listed Currency in a Currency Pair. Counterparty - One of the participants in a financial transaction. Country Risk - Risk associated with a cross-border transaction, including but not limited to legal and political conditions. Cross Currency Pairs or Cross Rate - A foreign exchange transaction in which one foreign currency is traded against a second foreign currency. For example; EUR/GBP Currency Symbols AUD - Australian Dollar CAD - Canadian Dollar EUR - Euro JPY - Japanese Yen GBP - British Pound CHF - Swiss Franc Currency - Any form of money issued by a government or central bank and used as legal tender and a basis for trade. Currency Pair - The two currencies that make up a foreign exchange rate. For Example, EUR/USD Currency Risk - the probability of an adverse change in exchange rates.
D
Day Trader - Speculators who take positions in commodities which are then liquidated prior to the close of the same trading day. Dealer - An individual or firm that acts as a principal or counterpart to a transaction. Principals take one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party. In contrast, a broker is an individual or firm that acts as an intermediary, putting together buyers and sellers for a fee or commission. Deficit - A negative balance of trade or payments. Delivery - An FX trade where both sides make and take actual delivery of the currencies traded. Depreciation - A fall in the value of a currency due to market forces. Derivative - A contract that changes in value in relation to the price movements of a related or underlying security, future or other physical instrument. An Option is the most common derivative instrument. Devaluation - The deliberate downward adjustment of a currency's price, normally by official announcement.
E
Economic Indicator - A government issued statistic that indicates current economic growth and stability. Common indicators include employment rates, Gross Domestic Product (GDP), inflation, retail sales, etc. End Of Day Order (EOD) - An order to buy or sell at a specified price. This order remains open until the end of the trading day which is typically 5PM ET. European Monetary Union (EMU) - The principal goal of the EMU is to establish a single European currency called the Euro, which will officially replace the national currencies of the member EU countries in 2002. On Janaury1, 1999 the transitional phase to introduce the Euro began. The Euro now exists as a banking currency and paper financial transactions and foreign exchange are made in Euros. This transition period will last for three years, at which time Euro notes an coins will enter circulation. On July 1,2002, only Euros will be legal tender for EMU participants, the national currencies of the member countries will cease to exist. The current members of the EMU are Germany, France, Belgium, Luxembourg, Austria, Finland, Ireland, the Netherlands, Italy, Spain and Portugal. EURO - the currency of the European Monetary Union (EMU). A replacement for the European Currency Unit (ECU). European Central Bank (ECB) - the Central Bank for the new European Monetary Union.
F
Federal Deposit Insurance Corporation (FDIC) - The regulatory agency responsible for administering bank depository insurance in the US. Federal Reserve (Fed) - The Central Bank for the United States. First In First Out (FIFO) - Open positions are closed according to the FIFO accounting rule. All positions opened within a particular currency pair are liquidated in the order in which they were originally opened. Flat/square - Dealer jargon used to describe a position that has been completely reversed, e.g. you bought $500,000 then sold $500,000, thereby creating a neutral (flat) position. Foreign Exchange - (Forex, FX) - the simultaneous buying of one currency and selling of another. Forward - The pre-specified exchange rate for a foreign exchange contract settling at some agreed future date, based upon the interest rate differential between the two currencies involved. Forward Points - The pips added to or subtracted from the current exchange rate to calculate a forward price. Fundamental Analysis - Analysis of economic and political information with the objective of determining future movements in a financial market. Futures Contract - An obligation to exchange a good or instrument at a set price on a future date. The primary difference between a Future and a Forward is that Futures are typically traded over an exchange (Exchange- Traded Contacts - ETC), versus forwards, which are considered Over The Counter (OTC) contracts. An OTC is any contract NOT traded on an exchange. FX - Foreign Exchange.
G
G7 - The seven leading industrial countries, being US , Germany, Japan, France, UK, Canada, Italy. Going Long - The purchase of a stock, commodity, or currency for investment or speculation. Going Short - The selling of a currency or instrument not owned by the seller. Gross Domestic Product - Total value of a country's output, income or expenditure produced within the country's physical borders. Gross National Product - Gross domestic product plus income earned from investment or work abroad. Good 'Til Cancelled Order (GTC) - An order to buy or sell at a specified price. This order remains open until filled or until the client cancels.
H
Hedge - A position or combination of positions that reduces the risk of your primary position. "Hit the bid" - Acceptance of purchasing at the offer or selling at the bid.
I
Inflation - An economic condition whereby prices for consumer goods rise, eroding purchasing power. Initial Margin - The initial deposit of collateral required to enter into a position as a guarantee on future performance. Interbank Rates - The Foreign Exchange rates at which large international banks quote other large international banks. Intervention - Action by a central bank to effect the value of its currency by entering the market. Concerted intervention refers to action by a number of central banks to control exchange rates.
K
Kiwi - Slang for the New Zealand dollar.
L
Leading Indicators - Statistics that are considered to predict future economic activity. Leverage - Also called margin. The ratio of the amount used in a transaction to the required security deposit. LIBOR - The London Inter-Bank Offered Rate. Banks use LIBOR when borrowing from another bank. Limit order - An order with restrictions on the maximum price to be paid or the minimum price to be received. As an example, if the current price of USD/YEN is 117.00/05, then a limit order to buy USD would be at a price below 102. (ie 116.50) Liquidation - The closing of an existing position through the execution of an offsetting transaction. Liquidity - The ability of a market to accept large transaction with minimal to no impact on price stability. Long position - A position that appreciates in value if market prices increase. When the base currency in the pair is bought, the position is said to be long. Lot - A unit to measure the amount of the deal. The value of the deal always corresponds to an integer number of lots.
M
Margin - The required equity that an investor must deposit to collateralize a position. Margin Call - A request from a broker or dealer for additional funds or other collateral to guarantee performance on a position that has moved against the customer. Market Maker - A dealer who regularly quotes both bid and ask prices and is ready to make a two-sided market for any financial instrument. Market Risk - Exposure to changes in market prices. Mark-to-Market - Process of re-evaluating all open positions with the current market prices. These new values then determine margin requirements. Maturity - The date for settlement or expiry of a financial instrument.
N
Net Position - The amount of currency bought or sold which have not yet been offset by opposite transactions.
O
Offer (ask) - The rate at which a dealer is willing to sell a currency. See Ask (offer) price Offsetting transaction - A trade with which serves to cancel or offset some or all of the market risk of an open position. One Cancels the Other Order (OCO) - A designation for two orders whereby one part of the two orders is executed the other is automatically cancelled. Open order - An order that will be executed when a market moves to its designated price. Normally associated with Good 'til Cancelled Orders. Open position - An active trade with corresponding unrealized P&L, which has not been offset by an equal and opposite deal. Over the Counter (OTC) - Used to describe any transaction that is not conducted over an exchange. Overnight Position - A trade that remains open until the next business day. Order - An instruction to execute a trade at a specified rate.
P
Pips - The smallest unit of price for any foreign currency. Digits added to or subtracted from the fourth decimal place, i.e. 0.0001. Also called Points. Political Risk - Exposure to changes in governmental policy which will have an adverse effect on an investor's position. Position - The netted total holdings of a given currency. Premium - In the currency markets, describes the amount by which the forward or futures price exceed the spot price. Price Transparency - Describes quotes to which every market participant has equal access. Profit /Loss or "P/L" - The actual "realized" gain or loss resulting fromtrading activities on Closed Positions, plus the theoretical "unrealized" gain or loss on Open Positions that have been Mark-to-Market.
Q
Quote - An indicative market price, normally used for information purposes only.
R
Rally - A recovery in price after a period of decline. Range - The difference between the highest and lowest price of a future recorded during a given trading session. Rate - The price of one currency in terms of another, typically used for dealing purposes. Resistance - A term used in technical analysis indicating a specific price level at which analysis concludes people will sell. Revaluation - An increase in the exchange rate for a currency as a result of central bank intervention. Opposite of Devaluation. Risk - Exposure to uncertain change, most often used with a negative connotation of adverse change. Risk Management - the employment of financial analysis and trading techniques to reduce and/or control exposure to various types of risk. Roll-Over - Process whereby the settlement of a deal is rolled forward to another value date. The cost of this process is based on the interest rate differential of the two currencies. Round trip - Buying and selling of a specified amount of currency.
S
Settlement - The process by which a trade is entered into the books and records of the counterparts to a transaction. The settlement of currency trades may or may not involve the actual physical exchange of one currency for another. Short Position - An investment position that benefits from a decline in market price. When the base currency in the pair is sold, the position is said to be short. Spot Price - The current market price. Settlement of spot transactions usually occurs within two business days. Spread - The difference between the bid and offer prices. Square - Purchase and sales are in balance and thus the dealer has no open position. Sterling - slang for British Pound. Stop Loss Order - Order type whereby an open position is automatically liquidated at a specific price. Often used to minimize exposure to losses if the market moves against an investor's position. As an example, if an investor is long USD at 156.27, they might wish to put in a stop loss order for 155.49, which would limit losses should the dollar depreciate, possibly below 155.49. Support Levels - A technique used in technical analysis that indicates a specific price ceiling and floor at which a given exchange rate will automatically correct itself. Opposite of resistance. Swap - A currency swap is the simultaneous sale and purchase of the same amount of a given currency at a forward exchange rate. Swissy - Market slang for Swiss Franc.
T
Technical Analysis - An effort to forecast prices by analyzing market data, i.e. historical price trends and averages, volumes, open interest, etc. Tick - A minimum change in price, up or down. Tomorrow Next (Tom/Next) - Simultaneous buying and selling of a currency for delivery the following day. Transaction Cost - the cost of buying or selling a financial instrument. Transaction Date - The date on which a trade occurs. Turnover - The total money value of all executed transactions in a given time period; volume. Two-Way Price - When both a bid and offer rate is quoted for a FX transaction.
U
Unrealized Gain/Loss - The theoretical gain or loss on Open Positions valued at current market rates, as determined by the broker in its sole discretion. Unrealized Gains' Losses become Profits/Losses when position is closed. Uptick - a new price quote at a price higher than the preceding quote. Uptick Rule - In the U.S., a regulation whereby a security may not be sold short unless the last trade prior to the short sale was at a price lower than the price at which the short sale is executed. US Prime Rate - The interest rate at which US banks will lend to their prime corporate customers.
V
Value Date - The date on which counterparts to a financial transaction agree to settle their respective obligations, i.e., exchanging payments. For spot currency transactions, the value date is normally two business days forward. Also known as maturity date. Variation Margin - Funds a broker must request from the client to have the required margin deposited. The term usually refers to additional funds that must be deposited as a result of unfavorable price movements. Volatility (Vol) - A statistical measure of a market's price movements over time.
W
Whipsaw - slang for a condition of a highly volatile market where a sharp price movement is quickly followed by a sharp reversal.
Y
Yard - Slang for a billion.

Forex Techniques

Planning Forex trading strategies

Forex trading strategies are based on fundamental and technical types of analysis. This article gives you a better understanding of both types and ways of implementing them into your Forex trading strategies.

FUNDAMENTAL ANALYSIS

Political and economic changes are the basis here as they frequently affect currency prices. Traders relying on this analysis gather information about unemployment forecasts, political ideologies, economic policies, inflation and growth rates from news sources. Most traders combine Forex trading strategies to plot actual entrance and exit points and double-check the information.

Forex trading strategies consider that just like most markets the market is controlled by supply and demand. The two most critical affecting factors for them are interest rates and the strength of the economy that is affected by changes in the GDP, trade balances and the amount of foreign investment.

There are many indicators released by government and academic sources on a weekly or monthly basis. The most important and commonly followed are: interest rates, international trade, CPI, durable goods orders, PPI, PMI and retail orders. These are pretty reliable measures of economic health and are closely followed by all traders that rely on fundamental analysis while mapping out their Forex trading strategies.

Interest rates can strengthen or weaken the currency. In some cases high interest rates attract foreign money, however high interest rates frequently cause stock market investors to sell off their portfolios. They do so believing that the higher cost of borrowing money will adversely affect many companies. If enough investors sell off their holdings it can cause a downturn in the market and negatively affect the economy. Which of these two effects will take place, depends on many complex factors. Usually economic observers agree on how the current change in interest rates will affect the general economy and currency prices.

International Trade. If there is a trade deficit, it is usually considered a negative indicator, as more money is leaving the country than entering it. This can have a devaluing effect on the currency, but usually trade imbalances are already factored into the market consideration. If a country normally operates with a trade deficit, currency price should be unaffected. It will change if the deficit is greater than expected.

The cost of living (CPI) and the cost of producing goods (PPI) are important indicators as well. You should also watch the GDP (the value of all the goods produced in the country) and the M2 Money Supply which measures the total amount of currency for a country.

In the US alone there are 28 major indicators that have a strong effect on the financial market and should be closely watched. This information can be found on the Internet and is provided by many brokers. Use it for working out your Forex trading strategies.

TECHNICAL ANALYSIS

It is based on the following assumptions:

1. Combined market forces (political events, economic conditions, seasonal fluctuations, supply and demand) cause currency price movements considered in Forex trading strategies.

2. Currency prices on the Forex market follow trends. Predictable consequences have been linked with many recognized market patterns.

3. Forex trading strategies can rely on historical trends to predict current price movements. Forex market data has been collected for the last 100 years, over that time certain patterns have become emergent. Human psychology and the way people react to certain circumstances are the basis of these patterns.

Most traders consider technical analysis to be of critical importance even though they may also use fundamental analysis to support and confirm their Forex trading strategies. Unlike fundamental analysis, technical analysis can be applied to many currencies and markets at the same time. Since fundamental analysis requires detailed knowledge of the economic and political conditions of a certain country, it is nearly impossible for any single trader to perform it properly on more than a few countries.

Forex beginners may consider the complexities of technical analysis overwhelming and even unnecessary but if you wish to ensure the success of your Forex trading strategies do not ignore both analysis types.

Any quality online Forex broker should be able to supply you with a large variety of online charts for technical analysis. Working out your Forex trading strategies, you can purchase in-depth professional charts, there is usually a monthly fee involved in gaining access to this information. There is also free software available to help you with charting. Good charts are updated in real time.

Mapping out your Forex trading strategies, you should learn the market and study trends before you begin active trading. Most brokers will provide you with a practice account where you can place "paper trades" - practice trades where no real money is made or lost. But they act just like a real trade, so you can see exactly how your trade would have turned out if you had placed it for real. This allows you to become familiar with your broker's system as well as learning about the market without risking any money.

The second part of this article explores various charts and indicators you need to use while planning your unique Forex trading strategies.

READING FOREX CHARTS

Price charts can be simple line, bar or even candlestick graphs. They show prices during specified time intervals that can be anywhere from minutes to years.

Line charts are the easiest to read, they give a broad overview of price movement. They only show the closing price for the specified interval and make it easy to pick out patterns and trends.

With a bar chart the length of a line displays the price spread during the time interval. The larger the bar, the greater the price difference between the high and low price for that interval. It is easy to tell at a glance if the price rose or fell, because the left tab shows the opening price and the right tab the closing price. Then the bar will give you the price variation.Pprinted bar charts can be difficult to read but most software charts have a zoom function so you can easily read even closely spaced bars while mapping out your Forex trading strategies.

Candlestick charts are very similar to bar charts - they both show high, low, open and closed prices for indicated time periods. Originally developed in Japan for analyzing candlestick contracts, they are very useful for analyzing Forex prices and are therefore a handy "tool" in Forex trading strategy planning. However the color coding makes it easier to read the chart, green candlestick indicates the rising price and the red - the falling price.

The actual candlestick shape in reference to the candlesticks around it will tell you a lot about the price movement and will greatly aid your analysis. Depending on the price spread various patterns will be formed by the candlesticks. Many of the shapes have exotic names, but once you learn the patterns, they are easy to pick out, analyze and use while working out your Forex trading strategies.

Price charts are not usually used alone. To get the full effect, you need to combine them with some technical indicators: trend, strength, volatility and cycle indicators. The most commonly used indicators are:

Average Directional Movement Index (ADX) helps indicate if the market is moving in a trend in either direction and how strong the trend is. If a trend has readings in excess of 25 then it is considered a stronger trend. Effective "tool" when planning your Forex trading strategies.

The Moving Average Convergence/Divergence (MACD) shows the relationship between the moving averages which allows you to determine the momentum of the market. Any time that the signal line is crossed by the MACD it is considered to be a strong market.

The Stochastic Oscillator compares the closing price to the price range over a specific time frame to determine the strength or weakness of the market. If a currency has a stochastic of greater than 80 it is considered overbought. However, if the stochastic is under 20 then the currency is considered undersold.

The Relative Strength Indicator (RSI) is a scale from 1 to 100 that compares the high and low prices over time. If the RSI rises above 70 it is considered overbought where as anything below 30 is considered oversold.

The Moving Average is created by comparing the average price for a time period to the average price of other time periods.

Feel free to use these indicators to map out successful Forex trading strategies.

Understanding Forex

Forex trading education

Forex trading education helps you to get fundamental information about market peculiarities.

CURRENCY PAIR

Reading a foreign exchange quote may seem confusing at first. However, it's really quite simple if you remember two things when starting your Forex trading education:
1) The first currency listed is the base currency
2) The value of the base currency is always 1.

The US dollar is the centerpiece of the Forex market and is normally considered the 'base' currency for quotes. In the "Majors", this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of 1 USD per the second currency quoted in the pair. For example, a quote of USD/JPY 120.01 means that one U.S. dollar is equal to 120.01 Japanese yen.

When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote we previously mentioned increases to 123.01, the dollar is stronger because it will now buy more yen than before.

The 3 exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as GBP/USD 1.4366, meaning that one British pound equals 1.4366 U.S. dollars.

In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar.

In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.

Currency pairs that do not involve the U.S. dollar are called cross currencies, but the premise is the same. For example, a quote of EUR/JPY 127.95 signifies that one Euro is equal to 127.95 Japanese yen.

When continuing your Forex trading education, you will often see a two-sided quote, consisting of a 'bid' and 'offer'. The 'bid' is the price at which you can sell the base currency (at the same time buying the counter currency). The 'ask' is the price at which you can buy the base currency (at the same time selling the counter currency).

PIP

Once you start your Forex trading education, you will learn to love this word because it is what you will be seeking for the rest of your Forex career. A pip is the smallest denominator of a particular currency pair, so for the above example, if the EUR/USD moves from 1.2150 to 1.2155 then it has moved up 5 pips.

LEVERAGE

Leverage is a simple concept of Forex trading education. If you have $10,000 to trade with, your Forex broker will let you borrow money from him so that you can trade in larger quantities. They will let you borrow as much as 400 times (400:1) what you put up in a trade. Most brokers allow between 50:1 and 100:1 margin. So, if you put up $1,000, and your broker allows 100:1 margin, then you'll be trading $100,000 worth of currency (instead of $1,000).

That's important, because every pip equals a certain dollar amount. When you trade $10,000, each pip movement equals $1. The chart below shows how it goes from there. If you trade 10,000 worth of currency, each movement would be equal to $1. So if you bought at 1.1445 and sold at 1.1545, you would make 100 x $1, or $100. If you trade $100,000, each pip movement would equal $10 and so on.

LONG AND SHORT

There are 2 different ways to trade on the Forex market and many beginners (or those who continue their Forex trading education) are surprised to learn that they can actually make as much money when currency price moves down as when it goes up. Let's start with the most logical movement, when the price moves up.

Most people are very familiar with the concept of buying something at a low price and selling it when the price increases. So the concept of buying the EUR/USD at 1.2150 and selling it at 1.2160 for a 10 pip gain should seem logical. This process is called going long.

You can also do this in reverse! If you know that the currency price is more likely to go down rather than up, you can go short. This is just the opposite of the above transaction, selling it first and buying it back later in the hope that the price will go down for you to make profit.

This may seem strange at first, but the concept remains the same either way. You always want to buy something at a low price, and sell it expensive. The consecution of actions doesn't matter. You must both buy and sell; as long as you sell at a higher price than you buy you make profit. Let us continue our Forex trading education.

SPREAD

The difference between stock markets and the Forex market brokers, is that in the Forex market, broker commissions are either very low or zero. So how do the ?? make money? They make it from the "spread" - difference between the actual price and the offered price through a broker.

On the right you can see a typical board of currency pairs and their spreads. This one is taken from our feed this morning, and you can see the difference between the Offer (the price you can place on a sell order) and the Bid (the price you can place on a buy order) is 3 pips (the spread).

What does this mean to you though? Well, let's look at the board. If you bought the EUR/USD at 1.2158 as it is offered under the Offer column, and immediately sold it again before the price moved, you would only get 1.2155 as is shown in the Bid column. So the net result is -3 pips, or a loss to you, and a profit to the broker. Remember to always take the spread into account when placing a trade, setting targets and stop losses.

BEARS AND THE BULLS

Once (you have) started your Forex trading education, you will constantly see the terms "Bears" and "Bulls" in Forex books and chat rooms. These are terms that describe the general mood of the market. A "bear" market, is when the general mood of the market is down, i.e. when there are more sellers than buyers in the marketplace. A "bull market" is the opposite, when there are more buyers than sellers and the general mood of the market is up. Forex is a place where bulls and bears struggle, and if you can identify who is gaining the upper hand, then you can identify the direction of the price. Easier said than done, of course. There are many more areas to cover, this should help those only starting Forex trading education.

CALCULATING PROFIT AND LOSS

Forex market, is an around-the-clock cash market where the currencies of nations are bought and sold. Forex trading is always done in currency pairs. For example, you buy Euros, paying with U.S. Dollars, or you sell Canadian Dollars for Japanese Yen. The value of your Forex investment increases or decreases because of changes in the currency exchange rate or Forex rate. These changes can occur at any time, and often result from economic and political events. Using a hypothetical Forex investment, this article shows you how to calculate profit and loss in Forex trading. Let's push your Forex trading education to a new level together.

To understand how the exchange rate can affect the value of your Forex investment, you need to learn how to read a Forex quote. Forex quotes are always expressed in pairs. In the following example, your pair of currencies is the U.S. Dollar (USD) and the Canadian Dollar (CAD). The Forex quote, USD/CAD = 170.50, means that one U.S. Dollar is equal to 170.50 Canadian Dollars. The currency to the left of the "/" (USD in this example) is referred to as base currency and its value is always 1. The currency to the right of the "/" (CAD in this example) is referred to as the counter currency. In this example, one USD can buy 170.50 CAD, because it is the stronger of the two currencies. The U.S. Dollar is regarded as the central currency of the Forex market, and it is always treated as the base currency in any Forex quote where it is one of the pairs.

To continue your Forex trading education, please, proceed with our Forex trading strategies page.

Introduction to Forex

Foreign Currency Exchange (Forex) Trading allows an investor to participate in profitable fluctuations of world currencies. Forex trading works by selecting pairs of currencies and then measuring profit or loss by the fluctuations of one one currency's market activity compared to the other. For example, fluctuations in the value of the $ U.S. Dollar are measured against another world currency such as the British Pound, Eurodollar, Japanese Yen etc. Being able to discern price trends in market activity is the essence of all profitable trading and this is what makes foreign currencies so exciting, currencies are the world's 'best trending' market. This gives Forex investors a profit making edge that is unavailable in most other markets.

Forex Trading is being called 'today's exciting new investment opportunity for the savvy investor'. The reason is that the Forex Trading Market only began to emerge in 1978, when worldwide currencies were allowed to 'float' according to supply and demand, 7 years after the Gold Standard was abandoned. Up until 1995 Forex Trading was only available to banks and large multinational corporations but today, thanks to the proliferation of the computer and a new era of internet-based communication technologies, this highly profitable market is open to everyone. The Forex Trading Market's growth has been unprecedented, explosive, and continues to be unequaled by any other trading market.

Unlike traditional trading which brings buyers and sellers together in a central location (trading floors) in Forex Trading there is no need for a centralized location. Forex is a market where worldwide traders conduct business by high-speed Internet connections with the Interbank Foreign Currency Exchange via Forex Clearinghouses (also called Forex Brokerage Firms). Forex has not only become the fastest growing trading market, but also the most profitable trading marketplace in the world.

Simply stated, Forex is the most profitable because it is the world's largest marketplace. The Foreign Currency market as a whole accounts for over 1.2 trillion dollars of trading per day (as determined by the fourth Central Bank Survey of Foreign Exchange and Derivatives Market Activity, 1998. This figure is understood to be significantly higher today). To put this into perspective, on any given day the Foreign Currency Exchange Market activity is vastly greater than the Stock Market. It is 75 times greater than the New York Stock Exchange where the average total daily value (using 1998 figures) of both foreign and domestic stocks is $16 billion, and much greater than the daily activity on the London Stock Exchange, with $11 billion.

Furthermore, in addition to being the world's largest and most profitable market, The Foreign Currency Exchange Market is the world's most powerful and persistent trading market regardless of negative economic indicators. This is because currencies 'trend' better than every other market due to their macro-economic nature. Unlike many commodities whose supply and demand fundamentals can literally change overnight (as we found in the sudden dot com 'market adjustment' and even more abruptly on September 11, 2001), currency fundamentals are much less random, and far more predictable. This is well illustrated in the way interest rates are changed gradually and only in small increments.

Other examples of fundamental predictability are illustrated by the following statistics. Of the $1.2 trillion day trading in Foreign Currency Exchange, 83% of spot foreign exchange activity and 95% of swap activity involves US Dollars. The Euro is the second most active currency at 37%. The Japanese Yen (24%) and the British Pound Sterling (10%) are ranked third and fourth. The Swiss Franc is 7%, and the Canadian and Australian Dollars account for 3%.

Spot Forex is the type of forex trade in which self-traders concentrate most of their investment activity for reasons that are self-explanatory. By definition, a Spot Forex transaction is a currency trade transaction that has a settlement (liquidation) within a maximum of 2 working days following the closing of the trade. Therefore Spot Forex allows the self-trader high liquidity. Another popular feature for well-advised Spot Forex self-traders is the strong profit potential from continual market fluctuations by buying a specific currency when it is weaker and selling it when it is stronger, and the continual pairing of strong currencies against weak ones. This potential for profit or loss is amplified by the effect of leverage. Leverage is a term that describes what can be achieved when a smaller amount of money controls a much larger amount of money. With regards to Forex Trading for example, a leverage-factor of 100 can allow the trader to hold a 100,000 US Dollar position with a modest 1,000 US Dollar margin deposit. Online Forex day trading focuses its investment activity largely on Spot Forex because of the 'risk manageability' of in-and-out trading plus the potential to generate excellent and highly liquid profits.

"Few financial industries generate as much excitement and profit as currency exchange. Traders around the world enter trades for weeks, days or split seconds, generating explosive moves or steady flows, and money changes hands quickly at a staggering daily average of a trillion US dollars. Forex profitability is legendary. George Soros of Quantum Fund realized a profit in excess of 1 billion dollars for a couple of days work in September 1992. Hans Hufschmid of Soloman Brothers, Inc. netted $28 million for 1993. Even by Wall Street standards, these numbers are heartstoppers".*

Despite its high trading volume and its fundamental role in the world, the Forex Market is rarely in the media limelight because its method of trading transaction is less visible than the Floor of a Stock Exchange. However, trading on the Foreign Currency Exchange Market is today surging into the public awareness, as flocks of internet traders are attracted by the market's inherent profitability and risk manageability. Add to this the absence of geographic or temporal boundaries and vibrantly active Forex market is open to all players.

* "Trading in the Global Currency Markets", Cornelius Luca, 2000

Our Office Locations

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