Posts Tagged ‘instaforex’

The features of long-term trading on Forex

Tuesday, October 12th, 2010

The trading on the international currency market is divided into two groups: long-term and intraday. However, their methods and approaches are different. Today we will talk about the features of long-term trading on Forex market.

It is deductible from the term that this kind of trading requires a long period of time. This method implies a deal with “take profit” and “stop loss” orders.

In several days or weeks, or even months the trader sees that one of the orders got activated. In this case only two variants are possible – big profit or insignificant loss that depends on the level of your stop-loss. Besides, using long-term trading it is possible to close the deal in advance. Everything seems quite simple, but it is necessary to remember that before making a deal and setting the “take profit” order a serious analysis of the current market situation should be carried out.

The trader should foresee if the currencies are now going to move the right way and continue this behavior in the future. It is not a problem for an experienced trader – conclusions about currency fluctuation can be based on weekly or monthly flow chart.

There is one thing the trader should not forget about while long-term trading – it is swap. Swap sets a deposit limit for long-term traders. In case you open the position that moves against you, you will regularly lose swap. It means that even if your deposit is comparable to swap loss, you will not get any significant profit despite the fact the trend moves the right way. You will lose money every time the position is passed overnight.

In spite of the fact swap losses are not big, they are very frequent. On the other hand, swap can be means of earning in case of the right market movement. Passing the position overnight is not dangerous itself, but in case the direction is originally wrong the deposit should be big enough to resist price movement against it.

Long-term trading has a considerable advantage – losses are very rare. Risk of loss is even less when you deposit a considerable sum. Working with as little as 1-3% of your deposit you make sure it is well defended. Even if currencies move thousands pips against you it will not affect your deposit. Nevertheless, certain money management rules should be followed; otherwise, it is just as easy to lose everything in the future.

Long-term traders must have a lot of patience. You will have to wait for a long time; if you cannot wait so long, you probably should pick another type of trading – short-term trade.

Added by Alexey Skachilov,
InstaForex
Clients’ relationship manager

Ichimoku Kinko Hyo technical indicator

Friday, October 1st, 2010

Any indicator, giving signals, is aimed at helping a trader to make a correct decision. The indicator is to provide clear and distinct signals so that they did not appear ambiguous to a trader.

The Ichimoku indicator was developed in Japan by Goichi Hosoda for Nikkei 225. Today this indicator is combined with Japanese candlesticks’ analysis due to the inability of the latter to determine market entrance and withdrawal levels and also market stop and limit orders.

Ichimoku is a trend indicator, detecting the generating trend, the one that has just originated and the reversing one. However, the Ichimoku indicator is not as effective for a flat market than for a trend one. Using this indicator, a trader can determine the currency status: flat or trend and the direction of the movement.

The Ichimoku indicator provides much information about the existing trend, its direction, support and resistance levels. It is represented by the five lines on the price chart. Four of them show the mid-point of the price spectrum for a certain time span. These lines can be also interpreted as the border line between bull and bear dynamics of the market.

The indicator’s lines:

  • Tenkan-sen (red line) shows an average price for the first time span, seen as the sum of low and high for this time span divided by two.
  • Kijun-sen (blue line) signifies an average price for the second time span.
  • Senkou Span A (yellow line) indicates the mid-point between the two preceding lines, shifted forward for the second time span.
  • Senkou Span B (brown line) shows an average price for the third time span, shifted forward for the second time span.
  • Chinkou Span (green line) indicates the price at which the current candlestick has been closed has been shifted back for the second time span.
The distance between Senkou lines is hatched in another colour, depending on which line is
situated above, and called ‘the cloud”.

The distance between Senkou lines is hatched in another colour, depending on which line is situated above, and called ‘the cloud”.

ishimoku

The key signal given by this indicator is the price crossing Senkou Span B line. The price crossing it from top downward is a signal to open a sell order and vice versa.

If the market is flat, the price is detected in the hatched area of the indicator. Crossing Tenkan-sen line from top downward suggests opening buy orders and vice versa.

If the mid- or short-term lines of Kijun-sen and Tenkan-sen are parallel to Senkou Span B it means that the market is being stable.

If the price is displayed in the hatched area and crosses Chinkou Span line from top downward, buy orders can be opened and vice versa.

Senkou Span A and Senkou Span B lines shape the resistance and support line in the hatched area. If the levels are higher than these lines then Senkou Span A and Senkou Span B lines are the first and the second resistance correspondingly.

The Ichimoku indicator signal is the Tenkan-sen line direction. If the line surges, the trend uprises; if it falls, so does the trend. If the line is parallel then the market is flat.

Added by Dmitry Antipov,
InstaForex Clients’ relationship manager

The difference between games of luck and Forex

Thursday, June 10th, 2010

There are two model of people’s activity –work or gaming. Game is always a risk, but in addition it is freedom of choice. Game can bring you huge winning and at the same time huge loss. However, it is insignificant how much efforts you spent for achieving the goal. So the main characteristic of a game is risk.

Work, on the contrary, is disciplined process, completely excluding any risks. The result of working process is salary.

Considering trade on the international currency market Forex, there cannot be any unambiguous answer for the question “What Forex is”. Everything depends on trader’s choice. Thinking of trading at Forex in terms of work, we can find many significant differences between it and usual working process. A trader does not have supervisors, position, career ladder, trader does not get fixed monthly salary, he does not need to go to the office every day. All this is both advantages and disadvantages of being a trader. It is not usual notion of work which everybody got used to.

Let’s now consider trading in the context of game. Opening and closing positions, traders parlay – what happens with the currency, whether its rate will move down or up. So having given correct forecast, trader gets profit, and, on the contrary, if he failed to predict changes on the market, he loses everything. It can be compared with casino but can not be called work.

As of today, many traders tend to suppose that trade on the international currency market Forex is work. The difference between casino game and trading on Forex consists in constant self-development, market analysis, basing on fundamental and technical factors of market behavior. A trader should monitor the quotations, follow the most important economic and political events in the world. And according to the information, he should make a decision on execution of operation.

If trader relies only on his intuition, the trading process adds up to casino game. If trading on Forex, you adhere to the basis of fundamental and technical analysis, you are always aware of economical and political situation in the world, estimate probable risks beforehand, then, undoubtedly, trade on the international market Forex is work.

Added by Alexandr Petryanin,
InstaForex Clients’ relationship manager

Mini-seminar of InstaForex Company was held in Johor

Monday, May 24th, 2010

There was the regular seminar held in Johor, Malaysia on May 8. The seminar was organized by the leading Forex broker InstaForex Company within the series of seminars 2010. Professional Forex lecturers of InstaForex Company Ismail Bin Mohamad and Asri Bin Mohamad and visitors had opportunity to discuss such topics as “Using medianline for high probability trading set up” and “Fundamental news trading”.

seminar-johor01

InstaForex educational seminar impressed by its friendly and constructive atmosphere of dialog. Everyone who visited this event on the 8th of May was satisfied with a lot of useful information.

InstaForex Company thanks all guests and participants of the seminar and invites everybody to attend our next arrangement.

Added by Dmitry Golynsky,
InstaForex
Development manager

InstaForex invites you to a new seminar in Malaysia!

Monday, May 3rd, 2010

InstaForex Company gladly announces about new event within the frameworks of Malaysian seminars’ series. Mini seminar will be held on May 8, 2010 in Johor (Malaysia). Two InstaForex lecturers Ismail Bin Mohamad and Asri Bin Mohamad will acquaint you with aspects of using medianline for high probability trading set up and peculiarities of fundamental news trading.

The participation in the seminar costs USD 60. These funds will be credited as bonuses to trading accounts of all visitors, so that you will be able to use this money in your trading and nail down attainments, received at the leacture.

Please, find the detailes in the poster below:

Seminar-Johor-poster