Forex Megadroid - Best Gift For Your Loved One - Forex Megadroid Currency Trading System

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Although forex is the largest financial market in the world, it is relatively unfamiliar terrain for retail traders. Until the popularization of internet trading a few years ago, forex (FX) was primarily the domain of large financial institutions, multinational corporations and hedge funds. But times have changed, and individual investors are hungry for information on this fascinating market. Whether you are an FX novice or just need a refresher course on the basics of currency trading, we'll address some of the most frequently asked questions about the FX market.

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Tutorial: Foreign Exchange

1. How does the forex market differ from other markets?
Unlike stocks, futures or options, currency trading does not take place on a regulated exchange. It is not controlled by any central governing body, there are no clearing houses to guarantee the trades and there is no arbitration panel to adjudicate disputes. All members trade with each other based on credit agreements. Essentially, business in the largest, most liquid market in the world depends on nothing more than a metaphorical handshake.


At first glance, this ad-hoc arrangement must seem bewildering to investors who are used to structured exchanges such as the NYSE or CME. (To learn more, see Getting To Know Stock Exchanges.) However, this arrangement works exceedingly well in practice. Self regulation provides very effective control over the market because participants in FX must both compete and cooperate with each other. Furthermore, reputable retail FX dealers in the U.S. become members of the National Futures Association (NFA), and by doing so agree to binding arbitration in the event of any dispute. Therefore, it is critical that any retail customer who contemplates trading currencies do so only through an NFA member firm.
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The FX market is different from other markets in some other key ways that are sure to raise eyebrows. Think that the EUR/USD is going to spiral downward? Feel free to short the pair at will. There is no uptick rule in FX as there is in stocks. There are also no limits on the size of your position (as there are in futures); so, in theory, you could sell $100 billion worth of currency if you had the capital. Interestingly enough, if your biggest Japanese client, who also happens to golf with the governor of the Bank of Japan, tells you on the golf course that BOJ is planning to raise rates at its next meeting, you could go right ahead and buy as much yen as you like. No one will ever prosecute you for insider trading should your bet pay off. There is no such thing as insider trading in FX; in fact, European economic data, such as German employment figures, are often leaked days before they are officially released.

Before we leave you with the impression that FX is the Wild West of finance, we should note that this is the most liquid and fluid market in the world. It trades 24 hours a day, from 5 p.m. EST Sunday to 4 p.m. EST Friday, and it rarely has any gaps in price. Its sheer size and scope (from Asia to Europe to North America) makes the currency market the most accessible in the world.
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[Since the forex market is a 24-hour market, there tends to be a large amount of data that can be used to gauge future price movements. This makes it the perfect market for traders that use technical tools. If you want to learn more about technical analysis from one of the world's most widely followed technical analysts, check out Investopedia Academy's technical analysis course.]

See reviews of forex brokers.

2. Where is the commission in forex trading?
Investors who trade stocks, futures or options typically use a broker, who acts as an agent in the transaction. The broker takes the order to an exchange and attempts to execute it per the customer's instructions. The broker is paid a commission when the customer buys and sells the tradable instrument for providing this service.
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The FX market does not have commissions. Unlike exchange-based markets, FX is a principals-only market. FX firms are dealers, not brokers. This is a critical distinction that all investors must understand. Unlike brokers, dealers assume market risk by serving as a counterparty to the investor's trade. They do not charge commission; instead, they make their money through the bid-ask spread.

In FX, the investor cannot attempt to buy on the bid or sell at the offer like in exchange-based markets. On the other hand, once the price clears the cost of the spread, there are no additional fees or commissions. Every single penny gained is pure profit to the investor. Nevertheless, the fact that traders must always overcome the bid/ask spread makes scalping much more difficult in FX. (To learn more, see Scalping: Small Quick Profits Can Add Up.)
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3. What is a pip in forex trading?
Pip stands for "percentage in point" and is the smallest increment of trade in FX. In the FX market, prices are quoted to the fourth decimal point. For example, if a bar of soap in the drugstore was priced at $1.20, in the FX market the same bar of soap would be quoted at 1.2000. The change in that fourth decimal point is called 1 pip and is typically equal to 1/100th of 1%. Among the major currencies, the only exception to that rule is the Japanese yen. One Japanese yen is now worth approximately US$0.01; so, in the USD/JPY pair, the quotation is only taken out to two decimal points (i.e. to 1/100th of yen, as opposed to 1/1000th with other major currencies).

4. What are you really selling or buying in the currency market?
The short answer is nothing. The retail FX market is purely a speculative market. No physical exchange of currencies ever takes place. All trades exist simply as computer entries and are netted out depending on market price. For dollar-denominated accounts, all profits or losses are calculated in dollars and recorded as such on the trader's account.
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The primary reason the FX market exists is to facilitate the exchange of one currency into another for multinational corporations that need to continually trade currencies (i.e., for payroll, payment for costs of goods and services from foreign vendors, and mergers and acquisitions). However, these day-to-day corporate needs comprise only about 20% of the market volume. There are 80% of trades in the currency market that are speculative in nature, put on by large financial institutions, multibillion dollar hedge funds and even individuals who want to express their opinions on the economic and geopolitical events of the day.

Because currencies always trade in pairs, when a trader makes a trade they are always long one currency and short the other. For example, if a trader sells one standard lot (equivalent to 100,000 units) of EUR/USD, they would have exchanged euros for dollars and would now be "short" euros and "long" dollars. To better understand this dynamic, if you went into an electronics store and purchased a computer for $1,000, what would you be doing? You would be exchanging your dollars for a computer. You would basically be "short" $1,000 and "long" one computer. The store would be "long" $1,000, but now "short" one computer in its inventory. The same principle applies to the FX market, except that no physical exchange takes place. While all transactions are simply computer entries, the consequences are no less real.

5. Which currencies are traded in the forex market?
Although some retail dealers trade exotic currencies such as the Thai baht or the Czech koruna, the majority trade the seven most liquid currency pairs in the world, which are the four "majors":
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EUR/USD (euro/dollar)
USD/JPY (dollar/Japanese yen)
GBP/USD (British pound/dollar)
USD/CHF (dollar/Swiss franc)
and the three commodity pairs:

AUD/USD (Australian dollar/dollar)
USD/CAD (dollar/Canadian dollar)
NZD/USD (New Zealand dollar/dollar)
These currency pairs, along with their various combinations (such as EUR/JPY, GBP/JPY and EUR/GBP), account for more than 95% of all speculative trading in FX. Given the small number of trading instruments – only 18 pairs and crosses are actively traded – the FX market is far more concentrated than the stock market. (To read more, check out Popular Forex Currencies.)

6. What is a currency carry trade?
Carry is the most popular trade in the currency market, practiced by both the largest hedge funds and the smallest retail speculators. The carry trade rests on the fact that every currency in the world has an interest rate attached to it. These short-term interest rates are set by the central banks of these countries: the Federal Reserve in the U.S., the Bank of Japan in Japan and the Bank of England in the U.K.
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The idea behind carry is quite straightforward. The trader goes long the currency with a high interest rate and finances that purchase with a currency that has a low interest rate. For example, in 2005, one of the best pairings was the NZD/JPY cross. The New Zealand economy, spurred by huge commodity demand from China and a hot housing market, saw its rates rise to 7.25% and stay there, while Japanese rates remained at 0%. A trader going long the NZD/JPY could have harvested 725 basis points in yield alone. On a 10:1 leverage basis, the carry trade in NZD/JPY could have produced a 72.5% annual return from interest rate differentials, without any contribution from capital appreciation. Now you can understand why the carry trade is so popular!

But before you rush out and buy the next high-yield pair, be advised that when the carry trade is unwound, the declines can be rapid and severe. This process is known as carry trade liquidation and occurs when the majority of speculators decide that the carry trade may not have future potential. With every trader seeking to exit his or her position at once, bids disappear and the profits from interest rate differentials are not nearly enough to offset the capital losses. Anticipation is the key to success: the best time to position in the carry is at the beginning of the rate-tightening cycle, allowing the trader to ride the move as interest rate differentials increase. (To learn more about this type of trade, see Currency Carry Trades 101.)
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How to Trade Bitcoin in 2018

How to Trade Bitcoin in 2018 - Last year was a stellar one for Bitcoin, as it opened trading at $966 before embarking on a rally that took it to as high as $20,000. Even after the volatility of the past few days, Bitcoin has beaten all the other asset classes by a huge margin. The big question on everyone’s mind now is: what will happen in 2018 and how should one trade Bitcoin? The experts are divided in their opinion. The aggressive bulls have given targets of above $60,000for 2018. That’s a 300% increase from the current levels. On the other hand, the skeptics continue to question the cryptocurrencies’ valuation, calling it a bubble. Some expect wild swings in 2018. Saxo Bank’s outrageous prediction lists a possible high of $60,000, followed by a drop to $1,000. Similarly, cryptocurrency entrepreneur Julian Hospbelieves that Bitcoin will fall to $5,000, but he tends to think that it will also touch $60,000. He is not sure which level will be reached first. While the predictions offer us different opinions, it is difficult to trade off them. So we have tried to identify a few unique patterns on the charts that repeated in 2017. These can be used as guidelines by the traders to develop a suitable strategy for 2018. 50-day Simple Moving Average In 2017, 50-day Simple Moving Average (SMA) acted as critical support. In all other instances, the price touched the moving average or dipped below it during intraday, but quickly recovered. So, a purchase close to the 50-day SMA offers a low-risk buying opportunity. Buy close to the 50-day SMA and keep a stop loss below it. 200-day EMA decline as long-term entry opportunity Bitcoin offered low-risk entry opportunities to the long-term traders en route to its 20-fold rise in 2017. It has not traded below the 200-day exponential moving average (EMA) since October 2015, which is critical support. In 2017, whenever the cryptocurrency broke below the 50-day SMA, it came within a striking distance of the 200-day EMA. This proved to be an excellent buying opportunity for long-term investors. Even in the next fall, a move close to the 200-day EMA should be seen as a buying opportunity. The price will not necessarily fall as low as the 200-day EMA, even during a large correction. On Jan. 12, for instance, it bottomed about 6.5 percent above the 200-day EMA. Similarly, on March 25, it was about 2.5 percent above the 200-day EMA. On July 16 the bottom formed 10.7 percent above the 200-day EMA. Though not perfect, traders can start their purchase about 15 percent above the 200-day EMA, with staggered buy orders below that. How do we calculate how far above is the price from the 200-day EMA? Though there doesn’t exist any specific indicator for it, we can use the “Price Oscillator” (PPO) by altering its values smartly. The PPO offers the percentage difference between two exponential moving averages. Therefore, if we need to plot how far away the price is from the 200 EMA, we can feed the values of 1,200, which will give us the desired result. What if Bitcoin breaks down below 200-day EMA? If the price breaks down of the long-term moving average, it is a warning signal that things have changed. It indicates that Bitcoin is either entering into a long-term downtrend or into a range-bound action, which will require a different trading strategy. In trading, profit is made by buying and selling at the opportune time. While we have identified a low-risk buying strategy, we have yet to ascertain the best time to sell. Let's take a look at that, next. Best place to sell There was no indicator that would have given a consistent sell signal at the top. But it was noted that a simple trendline did the job perfectly. Even as far back as 2014, a reading above 60 on the ADX has been a good selling point for Bitcoin. How to approach Bitcoin trading in 2018? It is easy to identify and fit indicators and trendlines once the chart has formed. Doing the same with live markets is not an easy task. All in all, it is almost impossible to forecast cryptocurrenciy price movements for the whole next year ahead, because the marker is still young to have developed repetitive patterns of price behavior. Try avoiding long-term prognosis. Happy trading.