The purpose of trading on any market is to buy low and sell high. The foreign currency market (FOREX) is no exception either. The goods traded on this market are rates of currencies of different countries. As any other goods the currencies have their prices. It may fluctuated up and down within time because of either speculation, news and other business progress.
To settle transactions between businesses located in different countries, governments, speculative transactions and so forth, banks around the world execute currency trades on FOREX market. Internet makes the communication and data transfer easily for the trade. Depending on various trade, economical and other parameters, interest rates, central bank policies, time of the day, preferences and anticipations of the market players, and many other causes, the rates, that is prices, of currencies stay in ceaseless motion.
Your task as a trader is to determine the trend of the rate and buy an appreciating currency or sell a depreciating one, and then take your profits through execution of a reverse transaction. The emotion should be always set aside even though you are eager enough to trade and make profits.
Each currency is assigned an international accredited three-letter code. For example, US dollar is coded - USD (United States Dollar), euro is coded EUR (EURo), Swiss frank is coded CHF (Confederation Helvetica Franc), Japanese yen is coded JPY (JaPanese Yen), British pound is coded GBP (Great British Pound). Currency rates are equal to ratios of currency units of different countries relative to each other. The rates are represented by 6-letter words composed of two three-letter currency codes. The first position is occupied, as a rule, by the code of a more expensive currency. The rates are expressed in units of the second currency per unit of the first one. For example, rates USDCHF (USD-CHF) show the number of Swiss franks in one US dollar, but rates GBPUSD (GBP-USD) show the number of US dollars having to be paid for one British pound.
The rates are usually expressed as five-digit numbers. For example, USDJPY = 121.44 means that 1 US dollar is valued at 121.44 Japanese yens (i.e. they are willing to pay you that many yens for one US dollar while you are buying or selling). At the same time, GBPUSD = 1.6262 means that 1 British pound is valued at 1.6262 US dollars. Generally, if the rate XXXYYY = Z, it means that one unit of XXX is worth Z units of YYY.
When the rate has changed, for example USDJPY = 121.44 to USDJPY = 121.45 or GBPUSD = 1.6262 to 1.6263, they say that the rate has moved 1 point. As it follows from the information above, yen in this example has DEPRECIATED by 1 point, but the pound has APPRECIATED, also by 1 point.
Every now and then, there will be somebody who asked me either on the web forum or by phone call regarding this matter. For them, to pick the right currency pair is like hell. I know many people (normally Asian trader) loves to trades in GBP/USD or EUR/USD currency pair.
I’ve been studying the currency market for so long and found out the the better currency pair for every short term forex trader is either GBP/JPY or GBP/CHH. These two currency pair is good for short term trader (who normally trading within 12 hours or less per day) because of their volatilities of it. The more volatile the market is for selected currency pair, the more you can make money.
It better to find or chose a minimum 120 pips per days currency pair for short term trader rather than choosing a very stagnant currency pair. For short term trading, you need to act fast and to manage your trading account with proper manners. I normally saw this currency moves from Down Trend (DT) to Up Trend (UT) within 5 minutes with range more than 45 pips. If you trade for USD$200, you will get more than USD$75+ within 5 minutes if you get more than 45 pips.
As for my research, I’ve found out that GBP/JPY and GBP/CHF normally works around minimum 120 pips per day which could generate more than USD$100 per day using 2 lot trading. This is good for normal trader (who have not more than USD$1000) on their available margin.
By the way for those who want to trade in GBP/JPY or GBP/CHF, I would like to advised you not to trade using a hedging technique as this will make you loose more than what you can expect. Check the graph or candlestick when needed and follow the movement without losing control on your available margin.
Hope that you will eventually trades in either GBP/CHF or GBP/JPY soon. If you need Forex Indicator or Signal, please visit this website: FOREXINDI
On December 7, 2007 I make 104 pips just buy trading on USD/CAD currency pair. This currency pair were not my target as I normally trades in GBP/JPY. But then I saw some spike on the short selling of this currency so I started to trade SHORT for this currency pair.
To my surprise, within 5 minutes I started to get more than 100 pips which in turn makes my profits surpass my target for single trading per single pair. I got $600+ for this trades on this lucky day.
This profit is good as I lose more than $250 on December 6, 2007 while targeting the GBP/JPY to LONG but the reality it goes SHORT for more than 40 pips. So this early week on December, I’ve already generate more than $2500+ earning and I hope that next week trading will give me more as I would like to end this year trading with green colour (not red) .. hahaha.
So hopefully I will get the massive income for this month (hope to break the $25k earning barrier). For those who are new in Forex Trading, please learn more about it prior to trade on live.
Here I would like to gives some insight about my income which happen comes directly from Forex Trading. For those out there who are already into Forex Trading, the better pair which have a good ranging around 120 pips per day is GBP/JPY currency pair.
I’ve been trading on this currency pair for almost 1 and a half year and found out that I can
generate much income using it. Firstly it is a very fast moving currency pair which is good for short term trading (i.e technical trading @ momentum trading). I only trade manually because it’s good to see the moves and make decision yourself. For me, I only use scalping technique when the market is very dormant.
For your information, the scalping technique is very good for EUR/USD and USD/JPY. But the best time to use scalping is around Asian Market (when dormant or slow market movement) as you can pick up 2 or 3 pips with ease.
So okay for that introduction which I will continue on another time. Back to the main subject.
Here is what I have been getting on November 2007 trading on GBP/JPY currency pair.
Platform : Marketiva & North Finance
Total Income : USD$15,207.88
Total Trading : 228 Position
Total Gain : 178 Position
Total Loss : 50 Position
Highest Gain : USD$800
Highest Loss : USD$552
