US Dollar requirements to Secure a Direction (2019 Q4 Dollar Forecast)

 US dollar has the most dramatic time during 2019. Many political and economical affected the stability direction.

• The Dollar’s level of activity measured through the 52-week range is nearly the lowest on record
• President Trump’s critique of the Euro and Yuan may signal a trade war evolving to currency war

Preview of the Q4 US Dollar trading

While there are thousands of economic matters buffeting the world's most liquid currency, there are certain considerations that have commanded the Dollar’s reins more readily these past months, and will likely continue to do so moving forward.

While trade wars (China Vs US) have been a critical point as to whether they can confer some measure of benefit or if they are clear detriment to the United States, data and sentiment surveys are starting to show clear strain on the economy. That may raises the pressure to over-taxed girders to the past decade of expansion.  what if the central bank moves too slowly, and refuses to act or the market simply deems it incapable of holding back the tides of change?

DOLLAR DXY CHART 2019

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➤ Forex reserves fall to $3.092 trillion (China's September 2019)

A slide down the monetary policy scale and/or economic struggle could readily pose a striking motivation for the Dollar relative to global counterparts. While the US central bank has thus far shown little enthusiasm to act in an effort to afford a cheaper currency and thereby growth through trade, there are forces that are pushing aggressively for just such a solution. US President Donald Trump made no effort to hide this clear interest through the past quarter.

White House could attempt a currency intervention as a bid to buy more time. In an increasingly competitive world and with elections starting to role forward, unorthodox options may look more appealing. If indeed this line is followed, the implications seem acutely straightforward for the Greenback.

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Source: Daily FX

Important Forex Knowledge you need to (Margin/Leverage)

Like any new skill you learn, you should learn it's basics to better practice this skill and to make a good path on it.

There are many important things you should know about Forex trading. may be you know it so no problem at all as you can review this knowledge again.

How to Make Money with Forex?

Major Currencies

The major currencies are the most eight traded currencies"the most important currencies"and of course the most widely used in the world.these currencies are:

• USD
• EUR
• JPY
• GBP
• CHF
• CAD
• NZD
• AUD

Minor Currencies  

Minor currencies are any other exist currencies "Not Major" so we can say that all currencies are minor except the eight major we mentioned previously.

Margin 

  

When opening a new margin with any trade broker"trading platform" you should have amount of money"beginning deposit" and this amount varies from a platform or a broker to another, it could be 50$ or 100$ but for sure 50$ is the minimum possible deposit in most of the platforms.

The maximum deposit is unlimited as you can trade up to 100,000 or even millions.

What is a Pip and a Pipette in Forex?

When you open a new trade an amount of your money goes a side as initial beginning deposit for this margin.

This amount is based on:

• The currency pair you choose to trade on.
• It's current price.
• Number of units to trade.

For example, if you were to open one mini lot so instead of having to provide 10,000$ you would only need 50$(10,000$*0.5%=50$) with a (200:1) leverage or  0.5% margin.

Leverage

 Leverage is the ratio of the capital amount to used to the required security deposit "margin".

This means that you can control large amount of dollar with a small amount of capital.

Leverage varies with different brokers and in different trading platforms ranging from 2:1 to 500:1

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What is a Pip and a Pipette in Forex?

There are some concepts that you need to know when trading in Forex. these concepts seems small and unimportant to you but actually it's very important.

You don't need to just know these concepts but you should understand them as well like:

• Pip
• Pipette
• Lot

What the pip is ?

The pip is a unit of measurement to show the difference between two currencies.

If EUR/USD moved from 1.4356 to 1.4357 so this 0.0001 is one pip. this means that the pip is usually the fourth decimal place of price quote.

  

What the pipette is ?

• Fractional pips are called pipettes.
• Is equal to a tenth of a pip. 

For example, if USD/GBP moved from 1.46757 to 1.46758 so this 0.00001 is called a pipette.

Here is how fractional pips "pipettes" look like in a trading platform 

Do you know how to read pips and it's values??

How to Make Money with Forex?

How to calculate the value of a pip ?

Value of a pip is different in every currency pair as each pair has their own relative value.

Example:

• Lets take USD/CAD = 1.0200 
• Pip value in terms of base currency = the value change in counter currency*the exchange rate ratio
• Pip = (0.0001 CAD)*(1 USD / 1.0200 CAD) = 0.000098 USD per unit traded

What is a Lot in Forex ?

In the past, Forex was only in specific amounts called lots which are the number of currency units you will buy or sell.

Standard size for a lot is 100,000 units but there are another types of lots:

• Standard 
• Mini
• Micro
• Nano 

Some people show quantities in lots and others show it in units but no problem for you now in dealing with any of them.

To take advantage in the pip's minute change rates"values" you need to trade with large amounts of specified currency to find a touchable profit or loss.

Let's assume we will use Mini lot size (10.000) and we choose to trade in USD/CHF  with exchange rate of 1.4555

This will give us = (0.0001 / 1.4555)*10,000 = 0.69 $/pip.

Here are some examples of pip value for USD/JPY and EUR/USD with the four types of lot sizes:

How to Make Money with Forex?

Placing a trade in the Forex market is very easy even if you don't have previous experience with the process.

The main objective of the Forex trading is exchange of one currency with another expecting it's price will change as the currency you bought will increase in value compared with the one you sold.

Let's take a simple example for that:

• You purchased 10000 euros at EUR/USD exchange market with rate 1.1900
• After one week you exchange your 10000 euros back to us dollars with rate 1.2600
• That means US dollar has increased 0.07 against Euro.
• Your profit = 0.07 * 10000 = 700 USD

Exchange ratio means the ratio of one currency against another currency.

How to Read a Forex Quote

Currencies always put in pairs like EUR/USD because in every Forex transaction you are buying currency and selling another.

What Is a Currency Cross Pair ?

• GBP : British Pound
• USD : American Dollar

The first currency to the left is the base currency (GBP) while the other to the right is the quote currency (USD).

In buying this means how much units you have to pay from the quote currency (USD) to buy one unit of the base currency(GBP) and in previous example you have to pay 1.51258 US dollars to buy 1 British pound.

In selling it means how many units of the quote currency (USD) you will get for selling one unit of the base currency(GBP) so you will receive  1.51258 US dollars when you sell 1 British pound.

The base currency is the basis for buying or selling.

Long / Short 

• First you have to determine whether you want to buy or sell.
• If buying(means buying base currency and selling quote currency)then you want base currency to rise in value so you sell it in higher prices.
• If selling(means selling base currency and buying quote currency)then you want the base currency to fall in value so you can buy it again with lower price.
• Long = Buy 
• Short = Sell

Bid / Ask and Spread

All Forex trades have two prices :

• The bid is the price you willing to buy the base currency in exchange with the quote currency.
• The ask is the price you willing to sell the base currency in exchange with the quote currency.
• In general, bid price is lower than ask price.
• The difference between ask price and bid price is called spread
• SPREAD = ask price - bid price

What Is a Currency Cross Pair ?

In the past, if you wanted to change currencies you would convert them first to US dollars then convert these US dollars to the currency you desire.

For example, if you wanted to change Japanese Yen to UK sterling you would first convert Japanese Yen to US dollars then convert US dollars to UK sterling.

The invention of Currency Crosses made this process very easy as you don't have to convert to US dollar in every exchange"middle process".

Examples of cross pairs:

• EUR / GBP
• EUR / JPY 
• GBP / JPY
• EUR / CHF 
• EUR / USD
• USD / JPY

Calculating Currency Cross Rates

Do you want to know how currency crosses are calculated ?

It's all about numbers so if you like numbers, you will find this part interesting.

Of course trading platforms do this process automatically and you don't need to think about that but here we will explain the method and currency cross rates.

Forex Vs. Stocks

For example let's take EUR / JPY and we want to find the bid/ask price for them but why these 2 pairs ??

The answer is because both of them have USD as their common denominator.

• First we will look at the bid / ask price for both EUR and JPY.
• Let's say we found EUR/USD : (1.5230)(bid) / (1.5235)(ask).
• And for USD/JPY : (89.38)(bid) / (89.43)(ask).

To calculate the bid price for EUR/JPY you multiple bid prices of EUR/USD and USD/JPY which in our case will be ((( 136.13 ))).

To calculate the ask price for EUR/JPY we will do the same process by multiplying ask prices of EUR/USD and USD/JPY which in our case will be ((( 136.25 ))).

Is Forex Trading Tax Free?

Why Trade Currency Crosses ??

The US dollar is the reserve currency in the world so, about 80% of exchanges in Forex market contain US dollar.

Most agricultural and commodities like oil are priced in US dollar.

But why US dollar and not any other currency??

When countries want to buy stocks like Oil they have to own US dollar"Oil pricing in US dollar" so countries even large ones like China and Japan keeps reserve of US dollars in hand for easy buying and not to be in need to convert every time they wanna buy. that's why US dollar is so strong and considered the leading currency in the world.

Why Trade Forex: Forex Vs. Stocks

There are approximately 2800 stocks listed on the New York Stock exchange so will you check all 2800 stocks to know which one you will trade on ??

In currency trading, there are some of currencies traded, but market players prefer to trade the four major pairs.

Four pairs are  easier to trade than thousands of stocks, aren't they ??

Here are some of advantages of Forex market over Stocks market:

1- 24 Hour Market 

The Forex market is open for 24-hour. Most brokers are open from Sunday at 4:00 pm until Friday at 4:00 pm , with customer service usually available during this period.

also with ability to trade in U.S., Asian, and European market hours.

2- Minimal-No Commissions  

Most Forex brokers charge no commission or additional fees to trade currencies online or in the phone.

Forex trading costs are lower than other market.

3- Instant Execution of Market Orders 

Your trades are instantly executed under normal market conditions. Under these conditions, usually the price you see when you execute your order is the price you get.

Keep in mind that many brokers only guarantee stop, limit, and entry orders under normal market conditions.

Forex Trading Order Types

4- Short Selling 

Unlike equity market, there is no restriction on short selling in currency market. Trading opportunities exist in the currency market whether a trader is long or short, or whatever way the market is moving.

Since currency trading always involves buying one currency or selling another, there is no structural bias to the market. So you always have equal access to trade in a rising or falling market.

5- No Middlemen 

One of the most problems in exchanges is middlemen and any third party between trader and buyer will cost them extra money "time or fees".

On the other hand, Spot currency trading is decentralized, which means quotes can vary from different currency dealers.

6- Buy-Sell programs don't control market 

How many times have you heard that “Fund X” was selling “Y” or buying “U”? The stock market is very susceptible to large fund buying and selling.

In spot trading, the large size of Forex market makes the probability  of any one fund or bank controlling a currency very small.

 Maximize your Forex Trading profit through new Technical Indicators

Forex Traders and trading orders types

In real life people are different from each other and not the same as some people are tall, others are short "fat and thin" and so on.

People personalities are also different and varies from one to another, it's the same in Forex there are several types of Forex traders and trade orders.

Forex Traders Types

There are four types of Forex traders:

 1- The Scalper 

Scalpers are Forex traders who deal or trade for short periods per trade that lasts up to 2 - 3 min max and their main objective is to deal short timing trades with small amount of profit or loss for several times.

Lots of people consider this way as the best way for beginners or from the perspective of safety for the following reasons:

• Single trade takes seconds to 2-3 minutes max.
•  you can trade for several times as long as you have time.
• Although its small profit but also a small loss and it's known you won't earn for good or loss for good.

 2- Day Traders 

Day traders are Forex traders who start their trades at the beginning of the day and finish at the end of the day with profit or loss.

these types of traders don't like to hold tradings overnight "day by day trades".

 3- Swing Traders

Swing traders are Forex traders who like to hold their  trades for several days.

This type will suits people who don't have time to decide on their trades through daylight so they make these decisions every night after analyzing the market.

 4- Position Traders

Position traders are Forex traders who have their trades for weeks, months or even years. these traders are considered experts traders who have large experience about trading and Forex.

That was the main types of traders but what are types of trading orders ??

Maximize your Forex Trading profit through new Technical Indicators

Forex Trading orders Types

The word "order" means how you will enter or exit a trade.

 1- Market Order 

Market order means to take your action"buy or sell"  according to the best available price 

Foe example, the bid price for EUR-AUD is at (1.3140) at the moment and ask price is at (1.3145) so if you want to buy EUR-AUD then it will be sold to you at (1.3145).

If you click buy then the trading platform will execute buying order at that price.

then you can buy more or sell what you have according to increasing or decreasing of price"your decisions".

 2- Limit Entry order 

Limit entry is an order which you place to buy below market or sell above market at certain prices.

For example, EUR-AUD is trading at the moment at (1.3140) and you want to sell when it hits (1.3160) so you can wait and sit until it hits this price and sell or you can make sell limit at (1.3160) and leave.

The trading platform will auto make sell when the price reaches (1.3160), you can also make the same when buying.

  3- Stop Entry order 

Stop entry is an order which you place to buy above market or sell below market at certain prices.

For example, EUR-AUD is trading at the moment at (1.3140) and heading upward.

You think the price will continue to increase until it hits (1.3150) so you can wait, sit until it reaches this price or make stop entry at (1.3150) the trading platform will do it automatically.

  4- Stop Loss  order 

Stop loss order is a type of order linked to a trade for  preventing additional losses if the price goes against you.

A stop loss order remains in effect until the position is liquidated or you cancel the stop loss order.

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