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  1. #11
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    Understanding the concept of overnight interest (Swap)

    According to the type of trade (Buy/Sell) and how much money you have got in your account, you have to pay/receive interest for the trades you keep open more than a trading day. Pay attention to close out your trades intraday if you are not willing to pay interest.

    Roll over interest is part of the market, as in every currency exchange we are required to borrow a currency in order to pay foranother one. The interest shall be paid for the borrowed currency and will be received for the currency which has been bought. If the interest for the currency that the client has bought is more than the interest of the borrowed currency, the net difference will be positive and the client will earn some money this way or vice versa.

    Ask your broker for details of the roll over.

  2. Thanks PCMNewsdesk thanked for this post
  3. #12
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    Trading virtually with a Demo Account

    Hello guys,
    Sorry for any delay, I needed to refresh and sort my mind to get back here.
    so, lets have the case continued:

    Trading virtually with a Demo Account
    You can open a demo account to practically get familiar with the concepts we learnt earlier.
    You can open a demo account with PCM Brokers using the following link:

    Open a demo account

    A demo account has all functionalities of a live account. This type of account gives you the ability to learn from the market and have all your skills tested and proved without risk.
    To learn how to work with the Meta Trader 4 platform, please refer to the following link:

    PCM Trader Platform


    You need to have a demo account, before getting a real account opened.

  4. #13
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    Online Trading Platform

    Online Trading Platform

    Authentic financial markets give you the ability to trade easily through an internet connection.
    Any trading platform should have following functions:

    · Easy to watch real-time exchange prices.

    · Ability to generate account summary including the account status, profit and loss, available margin and any margin reserved for open trades.
    Most trading platforms are web-based (usually JAVA), or desktop versions, which require installation on the computer.

    · Web based software will be hosted by your broker company. You are not required to install anything on your computer and you can log into it by user ID and password from any PC.

    · A desktop version, needs to be installed on your computer and will be operable only from that particular computer.
    Usually the platforms that you download and installed on your PC, are faster and have more options, but they are designed for a specific operating system and most of them work under Microsoft Windows operating system. So, if you are working with Linux, you will have to use the web based edition. The web based applications can be executed from any PC, because the main and the core part of the application is residing on the broker’s server, and the only thingit requires to get up-and-running is internet connection and browser on your PC.

    The web based applications is more popular than the ones to be downloaded and installed, as they are less vulnerable against viruses and hackers attacks.
    It is required to have a high speed internet connection (e.g. ADSL 2+ and so on) for trading.

    Financial markets are fast enough and you need real time quotes to execute your trade. Just make sure you have got a high speed connection. Just let it go and forget about trading, if you don’t have a high speed internet connection. It is useless to have for example a dial up internet connection. If you are going to trade online, you will need a powerful PC and a high speed internet connection.

    Some of the platforms could be bought and some of them are offered for free by the broker.

  5. #14
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    Major and Minor Currency Pairs

    Major and Minor Currency Pairs

    The 8 currencies which are considered by many to drive the global forex market and are the most heavily traded the most trading volume across the exchange rate market are: USD, EUR, NZD, AUD, CAD, CHF, GBP and JPY, therefore are called majors. The other currencies are called minors. In fact, across the market, five currencies which are the most attractive and have the highest liquidity are called Fab Five (USD, EUR, JPY, GBP and CHF).

    Cross currencies


    A currency which is not having USD on any side, is called a cross currency. These pairs show strange behaviors, because trading these crosses involve trading (exchanging) two individual pairs consisting of the exchange rate of both currencies versus USD. For example, going long for EUR/GBP, would be equal to buying EUR/USD and selling GBP/USD. Generally, trading crosses cost more commission (spread).

  6. #15
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    Getting to know the Types of orders

    Getting to know the Types of orders

    Trades are executed in 2 methods generally:

    1- Market Order

    2- Pending Order

    Market Order

    An order that an investor makes through a broker or over a trading platform to buy or sell an instrument (currency or commodity) immediately at the best available current price. A market order is the default option and is likely to be executed because it does not contain restrictions on the buy/sell price or the time frame in which the order can be executed.

  7. #16
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    Pending Order

    The order which has not been placed on the current quotes, but is meant to open a new position or close it at the desired price, is called Pending Orders. E.g. if EUR/USD has the exchange rate of 1.4328, the trader can send an order to the broker which tells to establish a sell trade if the price reaches to 1.4421. Pending orders have an additional option to Market orders and that is time. Two examples of such orders based on which direction and what price to enter is explained as follows.

    1.
    GTC (Good Till Cancelled)

    This is a type of order that will be remain active till the desired price is reached or the trader himself cancels it.

    2.
    Good For Day (GFD)

    This type of order will only remain active till the end of that working day it has been placed. The end of the working day is based on time table provided by your broker.Most of the brokerages set 24:00 hours (GMT) as the end of the working day and such orders will be cancelled automatically then.
    Various Pending Orders depend on the trigger prices besides the time they will be activated. There are four types of pending orders:

    Buy Limit


    This is a buy order that is placed lower than the current market price. This order is used when the trader predicts the current price is too high to make any purchase and waits till the price falls to the desired level.

    Sell Limit


    The sell order is set above the current market price. This order is used when the trader estimates that the current price is too low to sell and waits till the price moves up to the desired level.

    Buy Stop


    This is a buy order that is placed above than the current market price. This type of order is used when the trader predicts the bullish trend will begin above the current price of the market.

    Sell Stop


    A sell order that is set lower the current market price. This type of order is used when the trader estimates that the bearish trend will begin lower than the current price of the market.


    Other Trading Orders

    Other than the orders which are mentioned above that are available with the all the brokers, there several other orders. Most important orders which are defined for open and active trades are “Take Profit” and “Stop Loss”.

    Stop Loss (Cut Loss)

    This is from the family of stop type orders. This specifies for the broker in which price to stop/close/ liquidate the trade in case it penetrates the loss zone.

    Take Profit


    This is categorized in Limit order type. This order will specify to the broker what price to consider as profit to close/liquidate the trade.
    There some other orders between brokerages which offer other additional capabilities to the trader, such as OCO (One Cancel the other), this connects two orders with each other. Having one of them activated will cancel the other one simultaneously.

  8. #17
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    OCO (One Cancel the Other)

    This is a type of order containing of 2 limit orders or 2 stop loss orders. Two orders consisting of the price and the time which is being placed beneath and above the current market price. Having one of them executed, will result in the revocation of other one.

    Example: the exchange of EUR/USD is 1.2040, you are going to place buy order above 1.2095 resistance level hoping the price will climb. Also a sell order will be set at 1.1985. If the price reached 1.2095, your buy order will be executed and your sell order will b automatically cancelled.

    There are more types of orders between brokers or bank network which are not popular and that are not covered here.

  9. #18
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    Hi fellows,

    I think the aforementioned concepts on MT4 basics appears to be enough so far.

    I'd rather like to share some about
    Money Management and Psychology of trading, two lost parts in trading which could save you and keeps you alive across the market during the battle.

    Here is the matter:
    Last edited by stream1981; 06-05-2014 at 08:41 AM.

  10. #19
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    Money Management and Trading Psychology in the Forex Markets

    Money Management and Trading Psychology in the Forex Markets

    The most important reason and motivation to enter any market and work professionally, is to earn money. Choosing the right type of profession and investment could be influenced by various factors including personal, social conditions and the desired returns.

    Speaking frankly to those who are willing to step into the high volatility markets (e.g. currency, gold, silver, oil etc.), it should be noted that requirements to enter and invest in these markets are easy with high chance of success, but it should never be forgotten that volatile and unpredictable nature makes these markets difficult to master. To succeed in such conditions, the following three factors should be kept in mind always.

    a. Knowledge and Experience
    b. Money Management
    c. The vision and psychology

    In case of any of the above factors being neglected by the investor or failure to implement the principles, there is a high chance that a significant part of the money to be lost. The experience also reveals that people who are not having sufficient knowledge and experience in trading and those who are not implementing proper risk management measures, will also lose their money in a very short time.

    This is a part of a whole separate study that deals with the above concept; nonetheless, it is of utmost importance that you pay attention to these basic concepts that are directly related to your survival as a Trader and profitability of your investment.

  11. #20
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    Recognizing and using the principles of probability in trading

    Recognizing and using the principles of probability in trading

    Mathematical forecast or law of probability is an important concept within trading. You can use it in favor of your trades or let the market benefits from it.
    As mentioned earlier, we need to consider all the three general factors to succeed in the market and gain profit. The role and importance of these three factors is directly proportional to the failure in implementing them, resulting in huge losses. For example, if a trader has enough knowledge, experience, vision and psychological training, but lacks money management skills and fails to identify the risk involved, then he loses all his money in a short period of time.

    Paying commission in the form of spread (difference between Bid & Ask price) to the broker is also a major factor to consider. If you ever played a game of toss, you know the chance of winning and losing it is 50%-50%. With the added spreads, the chance of winning or losing a trade in financial markets, based on a forecast and analysis system that guarantees 50% rate of success, also gets reduced in the longer run.

    So, you need to find a strategy that raises the bar above 50% success. The other important factor is the amount of money you are trading with. Back to our example of the game of toss, you have $1 and I have $10 and I will be winning 1 cent on every tail and losing 1 cent on every head of the tossing coin. I will be losing the whole money if you get the head by 100 times and I will be winning all your money if I get the tails for 1000 times. See, the more money you have the more chances you have of survival. Now imagine that I’m losing 25 cents on every tail and I’m winning 25 cents for every head. What will happen in this situation? I will be a total loser after 4 consecutive tails, and you will loss the whole money after 40 consecutive heads. Now, in this scenario who is having high probability in their favor, one with 4 consecutive tails or 40 consecutive heads? Definitely and obviously, I will be as much as 10 times more likely to lose the whole fund I’ve got than you. The law of probability within the financial markets has objectivity and in case of using less amount of money accompanied by high leverages, the probability to lose money will get higher and by doing that, you have taken more risk than your account can tolerate and then eventually it will be a total waste of funds.

    To prevent such situation, start trading with fairly sufficient funds and low leverage. Rather than trying to raise your chance of success, try to eventually reduce the probability of losing against the market

  12. ARIONFORXtarder
 

 
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