Understanding Forex Spreads With Forexgen

Forex is always priced in pairs between two different types of currencies. When you make a trade, you have to buy one currency and sell another at the same time. If you want to exit the trade, you must buy/sell the opposite position. For example, when you think the price of the Euro is going to rise against the US Dollar.

In order for you to enter a trade, you will have to buy Euros and sell US Dollars.If you want to leave the trade, you will have to sell Euros and buy back US Dollars. You will be hoping that you were right in your guess and that the exchange rate for EUR/USD has actually risen, which means that you will get more Euros back than when you bought them, which is how you will make a profit.These days just about every forex broker is claiming to have the tightest spreads in the industry.learn more......

But marketing does have the ability to be deceiving. The topic of spreads in the forex spot market is very complicated and often not easy to understand. However, nothing affects your trading profitability more.First of all in order to understand the spread, you need to know what it is. A spread is the difference between the ask price (the price you buy at) and the bid price (the price you sell at) that is quoted in the pips. If the quote between EUR/USD at a given moment is 1.2222/4, then the spread equals 2 pips. read more....

If the quote is 1.22225/40, then the spread is going to equal 1.5 pips.The spread is how brokers make their money. Wider spreads will result in a higher asking price and a lower bid price. The consequence to this is that you have to pay more when you buy and get less when you sell, which makes it more difficult to realize a profit Brokers generally don’t earn the full spread, especially when they hedge client positions. The spread helps to compensate for the market maker for taking on risk from the time it starts a client trade to when the broker's net exposure is hedged (which could possibly be at a different price).Spreads are important because they affect the return on your trading strategy in a big way.

As a trader, your sole interest is buying low and selling high (like futures and commodities trading). Wider spreads means buying higher and having to sell lower. A half-pip lower spread doesn't necessarily sound like much, but it can easily mean the difference between a profitable trading strategy and one that isn’t profitable.The tighter the spread is the better things are going to be for you.for more informations....

However tight spreads are only meaningful when they are paired up with good execution. Quality of execution will decide whether you actually receive tight spreads. A good example of this is when your screen shows a tight spread, but your trade is filled a few pips to your disadvantage or is mysteriously rejected.When this occurs repeatedly, it means that your broker is showing tight spreads but is effectively delivering wider spreads. Rejected trades, delayed execution, slipping, and stop-hunting are strategies that some brokers use to get rid of the promise of tight spreads.for more informations....

Scalping Enabled Account:

Trade and scalp the market ForexGen has the pleasure to announce availability of both Dealing Desk and No Dealing Desk Platforms. No Dealing option provide traders with direct access to the best bid/ask prices through multiple bank access. No re-quotes & No dealer confirmation is the main characteristic of the no dealing option made specifically for “scalpers” and active FX professionals. Absolute freedom to trade during news and economic events. The no dealing desk option allows traders to place entry orders inside the spread! Unlike competing FX firms, ForexGen offers traders all the advantage of a “no dealing desk” option.for more informations....

PIVOT POINT TRADING WITH FOREXGEN

You are going to love this lesson. Using pivot points as a trading strategy has been around for a long time and was originally used by floor traders. This was a nice simple way for floor traders to have some idea of where the market was heading during the course of the day with only a few simple calculations.The pivot point is the level at which the market direction changes for the day. Using some simple arithmetic and the previous days high, low and close, a series of points are derived. These points can be critical support and resistance levels.The pivot level and levels calculated from that are collectively known as pivot levels.learn more.....

Every day the market you are following has an open, high, low and a close for the day (some markets like forex are 24 hours but generally use 5pm EST as the open and close). This information basically contains all the data you need to calculate the pivot levels.The reason pivot point trading is so popular is that pivot points are predictive as opposed to lagging. You use the information of the previous day to calculate potential turning points for the day you are about to trade (present day).Because so many traders follow pivot points you will often find that the market reacts at these levels. This give you an opportunity to trade.Before I go into how you calculate pivot points, I just want to point out that I have put an online calculator and a really neat desktop version that you can download for free HERE

If you would rather work the pivot points out by yourself, the formula I use is below:Resistance 3 = High + 2*(Pivot - Low)Resistance 2 = Pivot + (R1 - S1)Resistance 1 = 2 * Pivot - LowPivot Point = ( High + Close + Low )/3Support 1 = 2 * Pivot - HighSupport 2 = Pivot - (R1 - S1)Support 3 = Low - 2*(High - Pivot)As you can see from the above formula, just by having the previous days high, low and close you eventually finish up with 7 points, 3 resistance levels, 3 support levels and the actual pivot point.If the market opens above the pivot point then the bias for the day is for long trades as long as price remains above the pivot point. If the market opens below the pivot point then the bias for the day is for short trades as long as the market remains below the pivot point.The three most important pivot points are R1, S1 and the actual pivot point.The general idea behind trading pivot points is to look for a reversal or break of R1 or S1. By the time the market reaches R2,R3 or S2,S3 the market will already be overbought or oversold and these levels should be used for exits rather than entries.read more....

A perfect set up would be for the market to open above the pivot level and then stall slightly at R1 then go on to R2. You would enter on a break of R1 with a target of R2 and if the market was really strong close half at R2 and target R3 with the remainder of your position.This all looks pretty straight forward.Unfortunately life is not that simple and we have to deal with each trading day the best way we can. I have picked a day at random from last week and what follows are some ideas on how you could have traded that day using pivot points.On the 12th August 04 the Euro/Dollar (EUR/USD) had the following:High - 1.2297Low - 1.2213Close - 1.2249This gave us:Resistance 3 = 1.2377Resistance 2 = 1.2337Resistance 1 = 1.2293Pivot Point = 1.2253Support 1 = 1.2209Support 2 = 1.2169Support 3 = 1.2125..for more informations,.....

Forex Trading: Calculating Profit And Loss In Foreign Currency Trading With Forexgen

The foreign exchange market, or Forex market, is an around-the-clock cash market where the currencies of nations are bought and sold. Forex trading is always done in currency pairs. For example, you buy Euros, paying with U.S. Dollars, or you sell Canadian Dollars for Japanese Yen. The value of your Forex investment increases or decreases because of changes in the currency exchange rate or Forex rate. These changes can occur at any time, and often result from economic and political events. Using a hypothetical Forex investment, this article shows you how to calculate profit and loss in Forex trading.read more.....

To understand how the exchange rate can affect the value of your Forex investment, you need to learn how to read a Forex quote. Forex quotes are always expressed in pairs. In the following example, your pair of currencies are the U.S. Dollar (USD) and the Canadian Dollar (CAD). The Forex quote, USD/CAD = 170.50, means that one U.S. Dollar is equal to 170.50 Canadian Dollars. The currency to the left of the "/" (USD in this example) is referred to as base currency and its value is always 1. The currency to the right of the "/" (CAD in this example) is referred to as the counter currency. In this example, one USD can buy 170.50 CAD, because it is the stronger of the two currencies. The U.S. Dollar is regarded as the central currency of the Forex market, and it is always treated as the base currency in any Forex quote where it is one of the pairs.for more informations....

Let's go now to our hypothetical Forex investment to show how you can profit or come up short in Forex trading. In this example, your pair of currencies are the U.S. Dollar and the Euro. The Forex rate of EUR/USD on August 26, 2003 was 1.0857, which means that one U.S. Dollar was equal to 1.0857 Euros, and was the weaker of the two currencies. If you had bought 1,000 Euros on that date, you would have paid $1,085.70. One year later, the Forex rate of EUR/USD was 1.2083, which means that the value of the Euro increased in relation to the USD. If you had sold the 1,000 Euros one year later, you would have received $1,208.30, which is $122.60 more than what you had started with one year earlier. Conversely, if the Forex rate one year later had been EUR/USD = 1.0576, the value of the Euro would have weakened in relation to the U.S. Dollar. If you had sold the 1,000 Euros at this Forex rate, you would have received $1,057.60, which is $28.10 less than what you had started out with one year earlier. As with stocks and mutual funds, there is risk in Forex trading.learn more.....

The risk results from fluctuations in the currency exchange market. Investments with a low level of risk (for example, long-term government bonds) often have a low return. Investments with a higher level of risk (for example, Forex trading) can have a higher return. To achieve your short-term and long-term financial goals, you need to balance security and risk to the comfort level that works best for you.read more.....

Lowest Spreads With Forexgen

SpreadAll spreads are fixed intra-day and night and ForexGen maintains fixed spreads during normal market conditions.
ForexGen also offers a "No Dealing Desk" execution option which does not provide fixed spreads or guarantee regarding slippage. Clients are able to select this option at ForexGen's discretion.
Liquidation Any depreciation occurring to a point of depletion of an entire balance in Forex account, will be liquidated automatically without any margin calls.
FeesForexGen customers enjoy trading without commissions, transaction fees, overnight performance fees or execution.
Overnight positions (swap)ForexGen offers swap-free accounts. Swaps will not be applied to ForexGen accounts.
Deposit currencyClients can select to fund their live accounts with USD or EURO.
ReportingComplete and full detailed reporting about the account trading activities are generated 24 hours a day, 7 days a week.
Opening a live Account OnlineOpening a ForexGen trading account is easy, fast and secure. Just complete and submit your application online in just minutes. Representatives are available 24 hours a day, 7 days a week.read more....