Trading guide

Buy or Sell ?

Sunday, 14 June 2009 21:13

You believe that the Euro to US Dollar (EURUSD) rate will increase. In your account you have 2000 USD (eGlobal-standard). At a price of 1.2750 you buy 150,000 Euro for 150,000*1.2750 = 191,250 USD.

This is possible because of credit, which allows you to make transactions worth 100 times more than funds you have in your account (in this specific case, the maximum sum available for transactions is 2000*100 = 200,000 USD).

After a period of time, the exchange rate increases. You sell 150,000 Euro at the rate of 1.2850 and get 150,000*1.2850 = 192,750 USD.

Thus, after buying at a low rate and selling at a high rate, the difference 192,750 - 191,250 = 1500 $ is your gain. You have earned 75% of initial funds in your account, while the rate increased by 0.8%.

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2 Basic Types Of Analysis

Sunday, 14 June 2009 20:36

Fundamental Analysis :

Fundamental analysis is a way of looking at the market through economic, social and political forces that affect supply and demand. In other words, you look at whose economy is doing well, and whose economy sucks. The idea behind this type of analysis is that if a country’s economy is doing well, their currency will also be doing well. This is because the better a country’s economy, the more trust other countries have in that currency.
For example, the U.S. dollar has been gaining strength because the U.S. economy is gaining strength. As the economy gets better, interest rates get higher to control inflation and as a result, the value of the dollar continues to increase. In a nutshell, that is basically what fundamental analysis is.

Technical Analysis

Technical analysis is the study of price movement. In one word, technical analysis = charts.The idea is that a person can look at historical price movements, and, based on the price action, can determine at some level where the price will go.

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How Individuals Trade Forex

Sunday, 14 June 2009 20:05

FOREX stands for Foreign Exchange, an exchange of currencies. When a person comes to trade currencies, e.g. buy one currency and sell another one - it is called currency exchange trading, or simply known as Forex.

Because the value of each currency always on the move, it fluctuates depending on the local and global economic factors, there is always an opportunity to profit on those changes/fluctuations - it is called currency speculation.

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Buy or Sell ?

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