The question that everyone asks themselves when they start investing in the financial markets is: What is the safest? The answer is obvious, namely the Foreign Exchange, better known as Forex, which deals with currency exchanges, that is, the purchase and sale of currencies from two different countries; it allows you to make a really interesting economic profit with few investment transactions.
Forex is open 24 hours a day, Monday to Saturday, and allows all its investors to speculate on the currencies that dominate the world financial market; these are just some of the reasons that make Forex the market with the highest value in the world. Forex allows investors to avoid complicated market manoeuvres by getting used to making direct and fast investments right from the start. The market is virtually tamper-proof, thanks in part to the transparency of the transactions taking place on it. In short, if you know the rules of the market and you have a nose for business, it is the place to do good business.
There are two prices for each currency pair (the Bid/Money price and the Ask/Bill price). The bid/offer spread (Bid/Ask) is the difference between the price immediately available to sell (money) and the price immediately available to buy (letter). The trader must consider the spread very carefully, as its value is the minimum movement that the market must make to bring its position to profit.
The Italian translation of Bid Price is literally "Money Price", basically the price an investor is willing to pay to buy. But let us go into more detail:
This is the price that goes in correspondence with the regulated market, the Forex Exchange market is the currency market, an investor is willing to buy currency. The bid price has an opposite, i.e. the letter price or ask price, which is the price at which an investor is willing to sell. A market in a bullish position is certainly a money market, that is a situation in which on the trading book there are plenty of money orders both in numerical terms and for the volumes of financial instruments that are traded. The bid and offer prices show the relationship of forces in the field between buyers and sellers on a particular instrument.
The bid price is indicated on the left side of the quote. For example, in the USD/CHF 1.4527/32 price, the bid price is 1.4527, which means that you can sell one dollar for 1.4527 Swiss francs.
Let's take an example of a EUR/USD cross:
The Euro/Dollar exchange rate is 1.25200/1.25207. Let's say you believe that the euro will strengthen and therefore make the decision to buy €10,000 to $1.25207.
If a margin of 0.25% is used, for €10,000 exposed to the market, it is absolutely necessary to deposit only €25. If we calculate €10,000 x 0.25% the total is €25. Be careful, because working on the margin could result in more loss than you have deposited. So act with caution!
If you bought a currency with a higher value, you will have a high interest; if you bought a currency with a lower yield, you will be charged a higher or lower interest. During the day, however, note that the value of the Euro rose to $1.26200 / 1.26207. Now you can close the position and sell.
So if you buy, for example, with $1.25207 and then sell everything at $1.26200. What does that mean precisely? Simple, that the price rose precisely by 99.3 pips.
But how do I calculate my profit? Let's calculate it: €10,000 x ($1.25207 - $1.26200) = $99.3. Which then converted are €78 ($99.3 ÷ 1.26200). If, instead, the market had not moved in your favour, and maybe the price had fallen by 98 points, you could have lost as much as €78 (or about $99.3)
Deciding to enter the forex financial market is a great idea if you have a business nose and a good analytical method. To achieve this, study, method and instinct are required. The first rule to follow when deciding to "enter a position" or to act on a currency, is to analyze the direction of the market and decide whether it is convenient to buy or sell more following the right trend. A little practice remains the best way to learn quickly.
That economic trends are predictable through the analysis of numerical series is a matter of study and experimentation by many. If you are an experienced trader, you will have had to deal with the analysis of various metrics and trends: one of the most exciting theoretical models, also because it relates to one of the "mysteries" of nature, is the one that reconnects online trading with Fibonacci.
As part of our "study path", after addressing the main basic terms, today we will address a very important topic such as the analysis of trends in Forex market. As we did for the trends at home Trading, today we will deal with issues related to Forex indicators.
In this article I would like to talk about a very effective 30 second binary options trading technique. For this technique will be used simply tick charts and candle charts with a timeframe of 30 seconds. The indicators that we will need will be 3 moving averages of different colors that will be placed on the candle graph. The moving average at 3 periods will be blue, the one at 5 periods of fuchsia, the one at 14 periods of red.