Most forex brokers that you will use online have developed their trading platforms so that they calculate your profits/losses for you. So why am I writing this article?

Well, it’s pretty simple really.

If you are serious about being a successful forex trader you need to understand the mathematics behind your trades. Plus it makes sure that you can keep tabs on your forex broker, so you can make sure they are not ‘cooking the books’.

As a forex trader, I’d expect you to be numerate, so it should be pretty easy for you to calculate your profits and losses. But I can understand if you are new to forex trading it might not be initially self-explanatory.

The 2 formulae you need to commit to memory.

(In this calculation I’m assuming you are trading in USD.)

When the US Dollar is the second currency (the quote currency), the formula to use is:

1 – Profit is equal to: the price change in PIPs multiplied by the units traded. (e.g. profit = pips price change x traded units)

Secondly if the US Dollar is the first currency in the pair (base currency), the formula to use is:

2 – Profit is equal to: the change in price in PIPs multiplied by the units traded divided by the exit price. e.g. profit = price change in pips x units traded / exit price

So to ‘hammer this home’ and make sure you really understand this process I want to give you a few examples.

To start with we’ll use an example where the US dollar is the second currency, the quote currency, and to make things easy we’re going to use a 1% broker margin. So you can trade up to 100,000 USD with only 1000 USD.

OK?

Great. We’ll take the EUR/USD which for example is trading at 1.5618/9. Your analysis has led you to predict that the Euro is going to rise in value against the dollar so you start a trade to buy more Euros and sell US Dollars.

So you end up buying $100,000 worth of units at a price of 1.5619 – remembering that you are buying so you have to buy at the ask price – this is the last/second number in the quote (so you buy at the ask price of 1.5619 not 1.5618).

Your predictions turn out to be correct. Congratulations, the price rise to 1.5635/6. So you start another trade to sell the Euros and buy USDs. For this trade you use the bid price as you are selling, which is 1.5635.

So here’s where your maths comes in.

As you purchased the Euros at 1.5619 and then sold at 1.5635 your profit is 16 pips, or 0.0016. So before that makes any sense we need to convert that into proper money. So this is where we use our formulae.

Profits = 0.0016 (price change in pips) x 100,000 (units traded) = $160.00

If you are trading standard sized lots of a currency pair as we did above of 100,000, in which you use the USD as the quote currency, a quick rule to remember is that a pip is equal to c.$10. Hence 16 pips = $160.

So let’s take another quick example, but this time we’ll use the USD as the base currency.

You place a buy order for 100,000 units of USD/JPY at 103.20. The price increases and you sell at 103.33. You just made a quick 13 pips. So to calculate your profit in your second formula:

Profit = .13 (pips) x 100,000 (units traded) / 103.33 (exit price) = $110.78

Easy huh?

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titleCurrency Trading Strategy – How To Use The Fib 127 For Consistent Profits/titlepA solid currency trading strategy consists of entering a trade at the right place, having a stop that is properly calculated, and setting a reasonable profit target level that works time after time after time./ppMany newer traders set too ambitious profit targets expecting the trade to be the big one and hoping it will help offset the losses they have accumulated./ppHowever, a far more effective currency trading strategy is to set a reasonable profit target each time, not expecting the home run, and being satisfied with smaller profits which on a consistent basis will build the equity in the account surprisingly quickly once the compounding action kicks in./ppHere is where the Fibonacci tool comes in./ppThis article assumes a trader knows how to use the Fibonacci tool which comes as a standard technical analysis tool on most charting software packages./ppWhile the key retracement levels are 38, 50, 62 and 70 percent, two extension levels are commonly used – 1.27 and 1.62 percent./ppbThe Importance Of Fib 127/b/ppIt is the 1.27 level we are interested in./ppWhy?/ppBecause price regularly gets to the 1.27 level, or at least within a few pips of it. Price also gets to the 1.62 level fairly often but not nearly as often as the 1.27 level./ppSo if you are trading with the trend, always a safe currency trading strategy, and price has pulled back to the 50 or 62 retracement levels, there is a very reasonable chance price will reach the 1.27 target./ppIf price pulls back to the 79 retracement level it may not go so far. If you trade from that retracement, you will want to take the first profit at the end of the swing as price may not extend beyond that point to the 1.27 or 1.62 level./ppSome traders just focus on this currency trading strategy when going with the trend:/ppul liIn at the Fib 50 retracement/li liOut at the Fib 127 extension/li/ul/ppbWhy is this such a sound currency trading strategy?/b/ppBecause the Fib 38 retracement level does not offer such a good risk reward ratio many times. There is always the risk price will pull back further and take out your stop./ppOn the other hand, price frequently fails to reach the 62 or 79 retracement levels so the trader is left on the sidelines as the trade fails to get filled./ppThe 50 level is frequently reached so the trader has a good chance of getting his order filled./ppOn the other hand, the 127 extension is not too ambitious. In at 50 and out at 127 will often net a profit of somewhere between 25 and 40 pips. With a 20 to 25 pip stop the risk reward ratio is satisfactory./ppbHow To Use Fib 127/b/ppHere are some other factors to consider when using the Fib 127 extension:/ppLook to see if this level coincides with other factors such as/pliA previous key level of support or resistance on the higher time frames such as 1 hour, 4 hour, daily, or even weekly./liliThe 200 EMA (Exponential Moving Average) on the 1 hour or 4 hour. This often provides quite a strong level of support and resistance./liliA pivot point (Central Pivot Point, R1, R2, S1, S2, or M1-4 levels ) calculated from the previous days High, Low and Close./libr/ulpEven when targeting the Fib 127 as the profit taking point, it is wise to trim a couple of pips of the limit order. So often price will nearly reach Fib 127 and pull back./ppYes it might go on to touch it later but in the meantime price retraces and you have to have the mental stamina to be able to handle that./ppMany traders would rather just take a slightly smaller profit and save themselves one or two hours of price consolidation with the risk they may lose the profit altogether./ppA solid currency trading strategy develops over time. A key ingredient is not being too ambitious. The Fib 127 extension level is a reasonable profit target you can use regularly to extract your wages from the Forex market!/ppbFor a free Fibonacci calculator, pivot point calculator, and the best free economic calendars click here:/b/ppa target=_new href=http://www.vitalstop.com/Forex/tools.htmlhttp://www.vitalstop.com/Forex/tools.html/a/ppbFor a free candle chart pattern recognition reference tool click here:/b/ppa target=_new href=http://www.vitalstop.com/Forex/Candle-Chart-Patternshttp://www.vitalstop.com/Forex/Candle-Chart-Patterns/a/ppbSee how to use trendlines to get an optimum trade entry point:/b/ppa target=_new href=http://www.vitalstop.com/Forex/trendline.htmlhttp://www.vitalstop.com/Forex/trendline.html/a/pbrbr

I’m going to help you make money currency trading with my most profitable advice I try to apply on a daily basis. This is a perfect opportunity for all those people out there looking to develop a second income from the comfort of their own home.

My first piece of advice is to watch the news. The most important news to watch would be the morning news because all the important economic news comes out at scheduled times in the morning. This news is very important because economic stability of a country determines the quality of the price of currency. If the quality of the economy goes down, the price of the currency will go down internationally. This is just the way it goes. The last thing you want to do is make a trade and in the middle of it, the Federal Reserve releases some information and your “good trade” turns into a big loss because you missed the news. You want to pay attention to any news relating to the economy and how well it is doing. This includes GDP, unemployment rates, central bank interest rates, consumer spending, etc. Typically if these numbers are good, than it is good for the currency. If they’re bad, they’re bad for the currency.

The next thing I want to discuss is not what you trade, but when you trade. There are basically two different times you can trade, high volume and low volume. I recommend starting in the high volume time because this is when everyone else is trading. This leads to a more predictable outcome since you can be sure market forces are in control. If you look at low volume times, a large bank could make a big trade which could drastically change the direction of a currency. At this time you would be at the mercy of a bank.

Lastly, you’ll want to get Forex Killer for your computer, so you can better handle trades and become more profitable. This software will seek out and find the most profitable trends out there, so you can profit from them.

The automated software of Forex Killer will give you an immediate edge in the market. Make trades that work for your profit line. For more information on the Forex Killer software, check out Forex Charting Software.

Over the next few lines I will tell you a little story about my experience with my automated forex system, and why it is important that you have one if you want to make money consistently within the forex market.

Forex trading can be a highly profitable business, but as everything in life it all comes down to knowing very well what you are doing. So to make a profit within the forex market you must either be already an expert, or you have to try and become one fast, but then again, becoming an expert in anything within a short period of time is virtually impossible and very risky if it is your investment at stake.

Believe me, even if you are an expert you will make mistakes quite often, maybe not because of a lack of knowledge, but because we as humans sometimes let emotions like fear and greed take us over, and this is where a reliable automated forex system comes in.

I have been trading for quite a while, and I started by trying to educate myself as much as I could, so I began my trading operation on my own. I didn’t do that bad, but I was not making the kind of money I was expecting, considering what some friends of mine where cashing in every month.

After a few months I decided that I have had enough, so I confronted one of my friends to try and suck some information out of him; when I finally managed to break him, he agreed to let me in on what he was doing, and here is what I got:

He confessed to me that in addition to some manually placed trades, he was using an automated forex system that had the ability to place and close over 90% winning trades all by itself.

Initially I took that for a joke and kept asking him to come clean with me, but he insisted that that was it, and to dig me out of my skepticism he sat me at his pc and showed me his forex trading chart. After 15 minutes staring at the monitor, I was surprised by the sound of a new trading order being placed without me or my friend touching anything; it was the automated forex system working. My jaw fell to the ground and I almost strangled my friend for not sharing this with me before.

I stayed there for a several hours because I had to see more to actually believe it. Well, after almost 6 hours and an aching back from my friends crappy chair, I witnessed the automated forex system place 3 winning trades for a $600 profit.

As you might guess, I did not wait until the next day and went straight home to download the software, and after three months using it I can only say that not having it is a waste of your money. You read right, a waste of your money, because you will be missing out on profits that you cannot possibly make all by yourself, and here is why:

1) You can be attentive about what is going on in the forex market for only a few hours a day, because we as humans need to eat, sleep and sometimes even work, and every time you are not following the market trends you are potentially missing profitable entry points for a trade. The automated forex system will be on guard 24 hours per day, and it will take advantage of every good opportunity to place a winning trade, which often occurs during the night.

2) We as humans have a tendency to become scared and nervous when we feel we are about to lose money and that often leads us to make bad calls based on emotion rather than calculated analysis. The automated forex system will never be scared or greedy, it will always act based on the market conditions and therefore will have a much higher rate of winning trades.

This does not mean that you cannot trade based on what you know about the forex market, because having an idea of what you are doing will always place you ahead. However, if you team up with an automated forex system you are certain to increase your profits by 100% or more, and if you are new to the forex market, you will start on the right foot making profits from the very beginning with very little risk.

So if you have ever wondered whether you should have an automated forex system by your side or not, the answer is: Definitely. Not having it will cost you a lot of potential profits.

Visit the: http://www.specialonlinebusinessreviewauthority.com, for details about fully tested and reliable automated forex systems (the one I am using is the first in their list).

Also visit my blog at: http://makequickmoney-bigtime.blogspot.com/, as I am always posting comments on new ideas and giving away useful tools and resources.

The Internet has brought a lot of changes in the way that we live our lives and our conduct our personal business. We can shop, date, and bank online. You can do just about anything online.

We can even trade stocks, forex, bonds, futures to name a few online. Traders love having the convenience of being able to look at their accounts whenever they see fit, and brokers also like having the choice to take orders over the net as opposed to the phone.

When you are new to investing it is an advantage to have the ability to speak with a broker. You are able to ask questions face to face and have any fears taken care off. Online stock trading can be very risky when you don’t have the correct information. If this is the case, make sure that you learn as much as you can about trading stocks before you start trading online.

Most brokerage houses now offer online trading to their clientele. Because doing business can cut down operating costs a great thing about trading online is that fees and commissions can be much lower. Online trading is great but like anything there are some disadvantages.

When it comes to choosing an online broker or brokerage firm go with years of establishment as well as feedback from other clients. You won’t find one that has been in business online for many years of course because online trading is just in its infancy, but you can find a company that has been in business that long and now offers online trading.

Working on the internet means relying on a machine and like all other machines break downs can happen. In trading if this is at the most inopportune time it could cause losses for you. You won’t always have the ability to get online to make a trade. You need to be sure that you can call and speak with a broker if this is the case using the online broker. This is truth for both advanced traders or beginners.

Online trading is a fantastic opportunity, convenient and can be highly profitable but it isn’t for everyone. Think carefully before you trade online and make sure that you really know what you are doing. Do your research and homework and you will do very well.

For a FREE indeth Forex Trading E-Course visit Learning Forex Traiding Course. This trading course covers the important basics every trader must know before starting to trade, to get it for free Click Here!

Wadzanai Wendy Nenzou is an internet entrepreneur who is interested in the forex market, stockmarket, anything to do with investment. She has a Bachelor of Commerce and a Masters Of Accounting. She enjoys sharing her knowledge with other marketers and people at large. To learn more from her visit learning-forex-traiding.com

Automated Forex trading systems have become quite popular in the past couple of years as more and more ordinary people are flocking to the forex market in the hopes of striking it rich or at least creating a good sized profit stream to supplement their regular income.

Truth be told, the Forex market is as much a trap as it is an opportunity as the statistics display a harsh reality in which over 90% of all traders lose money while less then 10% profit. As the Forex market is intricate and complex, there is indeed room for automatic forex trading systems. They can make your life a lot easier and help you make more money in the process.

However, there is a danger in using an automatic forex trading program, and that danger is ignorance. It’s very easy to fall prey to the comfort of using a software which does half or all of the work for you. Some systems actually make the entire trade on your behalf. As we are all very busy, we tend to put our faith in systems to take our place.

Despite the fact that some Forex trading software are excellent, I advise you to always strive to educate yourself on how the forex market actually works. Even if you have an automatic system which works for you, you need to be able to do things yourself, recognize opportunities, evaluate risks and earning potential, and know how to manage your investments.

The difference between ignorance and knowledge in the Foreign Exchange market can be the difference between making hundreds of dollars a month (or losing even) and making tens of thousands. So, regardless of whether you have a software to work for you, continue to learn more and more on how the market works. This knowledge can be worth gold.

To read more about Forex programs, click here: Forex Trading Systems. John Drummond works from home. He writes often on business, trading, and finances. To read John Drummond’s review of how to acquire a Forex Education, click here: Online Forex Education Review.

If you are someone who is interested in investing, you must certainly have heard the term, Forex Trading. What many investors don’t know is that “Forex” is not a new term by itself, but rather a short form of “Foreign Exchange”. As the name implies, Forex Trading simply refers to Foreign Currency Trading.

As recently as ten years ago, Forex Currency Trading was confined to the large institutions and banks as they only had access to the tools and systems required to meet the then high barriers of entry set in the Forex Trading game.

Today, things have changed drastically. Recent advancements in technology have empowered the individual investor to participate in the game, and trade with any of the various online trading platforms that exist today.

Once you get started with buying and selling in the Forex Currency Trading market, it will become obvious to you that there exist four “Currency Pairs” that completely dominate the Forex market. The four pairs are “US Dollar vs. Euro”, “US Dollar vs. British Pound”, “US Dollar vs. Japanese Yen” and “US Dollar vs. Swiss Franc”.

The prime goal of any investor who deals in the Forex market is to hold a currency that is appreciating in value in relation to the other currencies. To illustrate with an example, if you choose to buy 100 British Pounds in exchange for 200 US Dollars, hold the 100 British Pounds for a week and in that period, the value of the British Pound appreciates in relation to the US Dollar, you get to convert those Pounds back into Dollars for say $250 and make a tidy profit.

Unlike domestic stock markets around the world that operate for only a few specified hours each day, Forex Currency Trading is open 24 hours a day. Since every country trades on the Forex market, it’s always business hours in some part of the world and so it’s open all day. The volume of trade on the Forex market is roughly a whopping $1.2 Trillion.

Another important distinction is that Forex Currency Trading is not centered on any exchange such as the NASDAQ. There is no central governing authority or organization and trading is carried out between all the major banking institutions of the world.

The advent of the internet has given rise to online Forex Brokers which are similar to an online stock trading account. These brokers have thousands of investors placing orders through their online portals and so are able to allow anyone to open a Forex account and buy and sell in any quantity.

Times have changed and made it extremely easy for anyone to trade on the Forex Currency Market. But, a new investor must keep in mind that it is a very complex and complicated environment that may offer amazing opportunities for wealth creation, but is also capable of relieving you of your hard-earned money in an easy fashion. A would-be investor is advised to do a lot of homework and gain as much knowledge as possible about the Forex market before choosing to make an investment.

For more information on Forex Currency Trading visit our site: All You Need to Know About Forex Trading Market.

During the chaotic uncertain times we live in, people often look at different outlets for income. Whether they are searching for a full time income to replace their job or a part time income so they can save a little each month. One venue people like to look at is trading or investing. Many people look to trade stocks, options, and futures. But most recently forex trading has grown immensely in popularity And for good reason. Here are some of the benefits of learning to trade forex:

1) A 24 hour trading market - With stocks and futures, the markets close at 4 pm est. With forex having an international platform, currency rates are constantly trading even if the US markets are closed. So if you come home from work at 5 pm. (like most people) you’ll always find a currency pair you can trade with forex. If you are a stock trader, by the time you get home, the market has already closed.

2) Completely recession proof – No matter how good or bad the US economy is doing, you can always be successful trading forex (as long as you know what you are doing). The dollar can always be traded with or against. As long as you can trade either way of the market, recession is something you never have to worry about, since money can be made on both sides.

3) The ability to trade anywhere - How many people in this world can say that they can travel when and where they want and still do their job? Not too many. Learning to trade forex correctly can lead to the freedom and time to do that. All it takes is a laptop and internet connection.

4) Trading flexibility – Most investment vehicles require a large sum to start trading. Most accounts require you to have 5K-10K to get started if you plan on trading stocks or futures. To be honest you’re going to need them, because it takes a lot of shares to make money trading stocks. With forex you can open an account with many brokers for a few hundred dollars. You have the ability to play micro or mini lots so you don’t have to trade with full lot sizes as the big boys do.

5) No commissions - Unlike stock brokers, the majority of forex brokers do not charge a commission for each forex trade you make.

These are just some of the many great benefits of forex trading.

Learning to trade forex is much easier than people might think. To see how I learned how to be successful forex trading, make sure to check out LearnForexDirectory.com to see more forex reviews

Forex autopilot systems are controversial. I guess that a smart forex trader who encounters forex autopilot trading software or any other kind of trading robot always asks the same question: Is this forex autopilot a scam? Well, in most cases forex autopilot software are indeed scams. They promise the moon but fail to deliver. Be aware of those.

However, it is just logical that there are SOME forex autopilot systems that do work. For example, it is well known that major investment banks do some forex speculation on a regular basis and it will be quite sure to assume that they are doing well. Have you ever thought who places the trades for those big institutes? True, they do have teams of professionals traders who analyze the economic news and get the “big picture”. But as the forex market is open 24 hours a day, 5 days a week and the number of trades executed per day is huge, be sure that investment banks have automated trading systems that execute the trades. With a good build in money management and risk management rules, these industrial automated forex systems make a fortune for the big dogs on the long run. These automated money making software are among the best kept secrets of the industry.

In the last few years, forex trading evolves and becomes available to private home-based traders. Soon enough, “home use” forex autopilot systems began to pop-up. As mentioned above, most of these systems worth nothing. But if you have 9 to 5 job, using forex autopilot is probably the only way for you to start generating residual passive income from forex trading. So here are 3 rules you should follow in order to avoid forex autopilot scams:

Rule#1: Look for a Money-Back Guarantee:

Never buy forex autopilot unless the merchant offers a free risk money back guarantee. Sellers who developed good systems have trust in their product and will not hesitate to promise you full refund in case you are not satisfied. You should check very carefully the terms of the guarantee. Do not be lazy. Read the “small letters”. Also, look for guarantees of at least 45 days, which is enough time to test the system with your demo account.

Rule#2: Check vendor’s Customer Support:

Do it before you buy. Serious vendors keep a customer support team that should be available during working hours on-line and via the phone. Simply contact the support team a few times prior the purchase and ask questions such as: How will you refund me if I decide that the system is not for me? Has the system been tested prior to launching and for how long? What is the system’s maximum draw down? and so on. The answers you get (or not…) will help you to make a decision with confidence.

Rule#3: After you buy – demo trade your autopilot system:

Do not risk real money before you get to know your forex autopilot system. You WILL make technical mistakes and you do not want to pay real money for these mistakes. Take the time and master the software. Customize it to your own needs and trading style. If it works for you then fine – you have an additional income generator that might be your primary source of income in the future. If it does not work – ask for your money back before the guarantee expires.

I cannot stress this enough – follow the above rules and minimize your risk exposure to virtually zero. Otherwise, you might be scammed.

For those of you who consider having an automated forex system – CLICK HERE to read some facts you did not know about the automated systems industry and learn how to test drive Forex Autopilot absolutely risk free.

Just don’t purchase any automated trading system before you read this

With a background in investments, having been involved in all types but my passion is stocks. I have been very involved in day trading, swing trading, options and penny stocks. The latter is what a true love, so let’s talk about it. Specifically, global pennystocks. Let me say from the onset, “There is great gain in getting involved in global pennystocks.” In fact, global pennystocks are where the money is really at. Of course the other side of the coin is true as well: There is the potential for great loss also. This is not for everyone. If you really want to play it safe throw your money into the local bank and get 4.75% interest after six to twelve months. Perhaps a little more risk is your fancy and placing a few dollars into the blue chip area works fine for you BUT if you are willing to get your education and play it smart (IE: paper trade until you are confident and have a method that works for you) then pennystocks (especially global pennystocks) are the way to go. Where else can you start off with so little and in a very short period of time walk away with ten to twenty times what you started off with?

Sorry for sounding like an apologist for global pennystocks; it is just the sheer potential and the small initial investment that has always been so exciting. Perhaps you are scared off by the scammers that slyly take advantage of newcomers that do not know better. Well, the truth is that you have to use your noggin a little. Ask yourself, “Why are they giving this great information away for free via e-mail? A little common sense will go a long way.

Having been the President of two stock companies, to this day I have never given a recommendation toward another company UNTIL now! Here it is. The company of recommendation has truly been above and beyond the best you will find at helping traders move into the winning column day after day. There is a link to the company at the bottom of the page. This trading program works so well because they create a win-win situation and that is what really works in the long run. Let’s get specific, here are a few things that are so impressive about the company:

Since its introduction, they have helped countless traders make large, consistent profits.

In the entire time that this company has been in existence they have never had a negative complaint. In fact, they are one of the only companies listed with the Better Business Bureau.

They have an actual physical address for their company on the financial district of Chicago. Most of these companies that advertise on the web are quickly slapped together home based business’ that come and go.

I can go on and on but figure this is a good place to stop. Just click on the link below to find out more information. Good trading ahead.

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