is guaranteed in forex trading. This term is associated with leverage. If Leverage 1:100 for mini accounts (10,000 contracts), the margin is used for 100 units of currency. Trading USD / CHF with a margin of $ 100. Trading EUR / USD to 100 euros or $ 130 if the rate of EUR / USD when it is at 1.3000.
Thursday, February 4, 2010
Tuesday, January 19, 2010
Margin Calculation
Margin Calculation
There are 3 groups of Currency Pair :
There are 3 groups of Currency Pair :
- Direct Rates
Currency Pairs at which USD operating as counter currency (USD is located at the right side of currency pair), example : GBP/USD, EUR/USD, AUD/USD, NZD/USD
- Indirect Rates
Currency Pairs at which USD operating as base currency (USD is located at the left side of currency pair), example : USD/JPY, USD/CHF, USD/CAD
- Cross Rates
Currency Pairs which do not involve USD, example : GBP/JPY, EUR/JPY, AUD/JPY, EUR/GBP, GBP/CHF
Sunday, January 17, 2010
Factors Affecting Support and Resistance Strength
Factors Affecting Support and Resistance Strength
- Support or Resistance's Length
The longer the time or the number of hits it got, the stronger it is. For example, a week's support or resistance creates a minor support or resistance, a month's support or resistance provides an intermediate level support or resistance, while 1 year's range will become a major / strong support or resistance. But you should keep in your mind that there is a point, where these levels are gradually become weaker when they get older. This is caused by fading people memories along with time.
- Support or Resistance's Height
The wider support and resistance zone, the stronger it is. A wide congestion zone between support and resistance acts like a higher barrier, and serves as a stronger level. The strength of this zone can be calculated by a percentage of current market value.
- Support or Resistance's Trading Volume
The higher the volume in a specific support and resistance zone, the stronger it is. A higher trading volume in a support or resistance zone, it means more traders involved in that zone. This scheme represents a stronger level of support or resistance area.
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