About ForexGen

ForexGen LTD is an online trading service provider supplying a unique and individualized service to Forex traders worldwide. We are dedicated to absolutely provide the best online trading services in the Forex market.
ForexGen LTD serves both private and institutional clients. We have a strong commitment to maintain a long term relationship with our clients.
ForexGen principalsForexGen LTD customer satisfaction is our major objective. To reach our business goals, we strive to put our client’s goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.

What is Leverage ?

This is the one characteristic that makes ‘FOREX’ trading so appealing trading more money than you have in your account. It’s of course a double sword and creates risk. The bulk traders fail at ‘FOREX’ trading because the over leverage their positions. For example, for every $1,000 you have, you can trade 1 lot of $100,000. So if you have $7,000 they may allow you to trade up to $700,000 of forex. Leverage to deal with it you need to enter & exit at optimum risk reward.

What is a margin call ?

A broker’s demand on an investor using margin to deposit additional money or securities so that the margin account in brought up to the minimum maintenance margin. This is sometimes called ‘fed call’ or ‘ maintenance call. You would receive a ‘MARGIN CALL’ from a broker if one or more of the securities you had bought (with borrowed money) decreased in value past a certain point.
Example
Let’s say you open a regular Forex account with $3,000 (not a smart idea). You open 1 lot of the EUR/USD, with a margin requirement of $1000. Usable Margin is the money available to open new positions or sustain trading losses. Since you started with $3,000, your usable margin is $3,000. But when you opened 1 lot, which requires a margin requirement of $1,000, your usable margin is now $2,000

Forex Broker

The main participants in forex market can be divided into the following types: banks, some commercial companies and some foreign currency brokers.
Broker is the intermediary who helps you access to foreign exchange (forex). Similar to a stock broker, these agents can also provide advice on forex trading strategies. This advice to clients often extends to technical analysis and research approaches designed to improve client forex trading performance

Choosing a Broker

There are many forex brokers to choose from, just as in any other market. Here are some things to look for:
Low Spreads - The spread, calculated in “pips”, is the difference between the price at which a currency can be purchased and the price at which it can be sold at any given point in time. Forex brokers don’t charge a commission, so this difference is how they make money.
Quality Institution - Unlike equity brokers, forex brokers are usually tied to large banks or lending institutions because of the large amounts of capital required (leverage they need o provide). Also, forex brokers should be registered with the Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC).
Extensive Tools and Research - Forex brokers offer many different trading platforms for their clients - just like brokers in other markets. These trading platforms often feature real-time charts, technical analysis tools, real-time news and data, and even support for trading systems. Before committing to any broker, be sure to request free trials to test different trading platforms.
Wide Range of Leverage Options - Leverage is necessary in forex because the price deviations (the sources of profit) are merely fractions of a cent. Leverage, expressed as a ratio between total capital available to actual capital, is the amount of money a broker will lend you for trading. For example, a ratio of 100:1 means your broker would lend you $100 for every $1 of actual capital.

Forex Provides up to 50 Times the Leverage of Stocks

Forex Brings Profit in Bear and Bull Markets
In the foreign exchange market, there is no short selling restriction. There is potential for profit in currencies regardless of which way the market moves. Forex always involves selling one currency to buy another, so there is no structural bias to the market.
Forex Provides up to 50 Times the Leverage of Stocks
Foreign exchange trading with Forex Capital Management can give you up to 50 times the leverage of your stock trading accounts. For every US$1,000 you invest in stocks, you gain control of at the most US$2,000 worth of shares. But with Forex Capital Management, margin of only US$1,000 gives you control of a currency trade of up to US$100,000 in currencies..

Cross Currency

A pair of currencies traded in forex that does not include the U.S. dollar. One foreign currency is traded for another without having to first exchange the currencies into American dollars.
Historically, an individual who wished to exchange a sum of money into a different currency would be required to first convert that money into U.S dollars, and then convert it into the desired currency; cross currencies help individuals

Why is Forex so popular?

Is so easy, anyone can do it. You don’t need to watch Bloomberg TV every morning or to buy every financial newspaper to determinate the trend. The Forex Market is highly predictable.
The ‘FOREX’ market is unique because of the following features:
trading volume.
the extreme liquidity.
the large number of, and variety of, traders.
geographical dispersion.
Average daily international foreign exchange trading volume was $1.9 trillion in April 2004 according to the BIS study Triennial Central Bank Survey 2004- $600 billion spot- $1,300 billion in derivatives, ie- $200 billion in outright forwards- $1,000 billion in Forex swaps- $100 billion in FX options.

What Tools Do I Need to Start Trading Forex?

A computer with a high-speed Internet connection and all the information on this site is all that is needed to begin trading currencies.
How much money does it take to open a real money trading account?
If you’re a new student of FOREX, you should first practice with a free practice account, often called “demo trading,” using “pretend” money. When you feel ready to trade with real money, you can open a “mini” account with as little $250 USD, although we recommend starting with no less than $1000-$2000.

Currency Day Trading Examples

With the information we have covered so far, let’s show a few examples of how much money can be made (or lost!) daily by trading currencies.
Example
trader thinks the euro will gain value versus the dollar (EUR/USD is at 1.2150)Let’s say that the price of the euro-dollar pair is 1.2150 and a day trader, based on his strategy, gets a signal that the euro is going to continue to go up. The trader buys 100,000 EUR (1 lot) at 1.2155 (121,550 USD). If the trader’s margin requirement is 2%, his margin deposit would be 2,000 Euros or 2,431 dollars. The trader automatically sets a stop loss of 25 pips based on his technical trading strategy. As the trader expected, the EUR/USD goes up to 1.2225 (on paper, everything works!). Assuming this meets the profit requirements of his day trading system, the trader sells the 100,000 Euros

Order Types

The term “order” refers to how you will enter or exit a trade. Here we discuss the different types of orders that can be placed into the foreign exchange market.
Basic Order Types
There are some basic order types that all brokers provide and some others that sound weird. The basic ones are:
Market order
A market order is an order to buy or sell at the current market price. For example, EUR/USD is currently trading at 1.2140. If you wanted to buy at this exact price, you would click buy and your trading platform would instantly execute a buy order at that exact price.
Limit order
A limit order is an order placed to buy or sell at a certain price. The order essentially contains two variables, price and duration. For example, EUR/USD is currently trading at 1.2050. You want to go long if the price reaches 1.2070.
Stop-loss order
A stop-loss order is a limit order linked to an open trade for the purpose of preventing additional losses if price goes against you. A stop-loss order remains in effect until the position is liquidated or you cancel the stop-loss order.

Weird Sounding Order Types

GTC (Good ‘til canceled)
A GTC order remains active in the market until you decide to cancel it. Your broker will not cancel the order at any time.
GFD (Good for the day)
A GFD order remains active in the market until the end of the trading day. Because foreign exchange is a 24-hour market, this usually means 5pm EST since that that’s U.S. markets close.
OCO (Order cancels other)
An OCO order is a mixture of two limit and/or stop-loss orders. Two orders with price and duration variables are placed above and below the current price. When one of the orders is executed the other order is canceled. Example: The price of EUR/USD is 1.2040. You want to either buy at 1.2095 over the resistance level in anticipation of a breakout or initiate a selling position if the price falls below 1.1985. The understanding is that if 1.2095 is reached, you will buy order will be triggered and the 1.1985 sell order will be automatically canceled.

Forex Terminology PIP

Every trader in the Foreign Exchange ‘FOREX’ hopes to make a profit from something called ‘PIP’. It may sound silly, but gains in pips can potentially make you over wealthy .Take your time with this information, as it is required knowledge for all Forex traders.
What is a PIP ?
Pips stands for ‘PERCENTAGE IN PIONTS’. In the Forex trading, a ‘PIP’ is a unit of measurement which represents the smallest change in the price of currency or a currency pair. In the stock markets this is a classified as a ‘POINT’. As a result, some folks refer to pips as points. Pips are the last decimal point in an exchange rate or currency pair.

How do I calculate profits and losses?

When you close out a trade, you can calculate your profits and losses using the following formula: Price (exchange rate) when selling the base currency - price when buying the base currency X transaction size = profit or loss Assume you buy Euros (EUR/USD) at 1.2178 and sell Euros at 1.2188. If the transaction size is 100,000 Euros, you will have a $100 profit.
($1.2188 - $1.2178) X 100,000 = $.001 X 100,000 = $100
Similarly, if you sell Euros (EUR/USD) at 1.2170 and buy Euros at 1.2180, you will have a $100 loss.
($1.2170 - $1.2180) X 100,000 = - $.001 X 100,000 = - $100
If the quote currency is not in US dollars, you will have to con- vert the profit or loss to US dollars at the dealer’s rate. Further, if the dealer charges commissions or other fees.

What Drives the forex market?

Different countries use different currencies, however cross-border has to take place. The FOREX is therefore a vehicle driven by the need to move monetary payments across border and transfer funds and value from one currency to another. If the whole world used one currency there would be no need for the FOREX market. For example if a US restaurant needs to buy Italian cheese it needs Euros to pay the Italian cheese maker so it must be able to exchange US dollars for Euros. Likewise if the US restaurant makes the payment in US dollars the Italian cheese maker must be able to exchange the dollars into Euros. It’s as simple as that.

What is traded on the Foreign Exchange?

The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, currencies are always traded in pairs; EX: the US dollar against Japanese yen, or the English pound against the Euro. So if a broker or a dealer believes that the Euro will gain against the dollar, he will sell dollars and buy Euros. Because you’re not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy

Can I trade from home?

Trade from anywhere. If you like to travel, this is a dream business. Take your laptop with you and you can trade the FOREX and make money anywhere in the world where you have an internet connection. You can be on the white-sand beaches of Guadeloupe (My country).You have total freedom of location. FX Trading is not bound to any one trading floor and is not centralized on an exchange, as with the stock and futures markets. The FX market is considered an Over-the-Counter (OTC) or ‘Interbank’ market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.
What is the spot market and on what exchange is it traded?
In the Wall Street Journal, one can read quotations for the spot rate, forward rate, and options. At the spot rate, currencies can be exchanged within two days i.e. on the spot. The word market is a slight misnomer in describing Forex trading, since there is no central location where trading takes place. The bulk of trading is between 300 large international banks, which process transactions for large companies and governments. These institutions are continuously providing prices for each other and the broader market. The most recent quotation from one of these banks is considered the market’s price for that currency.

Which Currencies Are Traded?

The most popular currencies along with their symbols are shown below:
EUR — Euros
USD — United States dollar
CAD — Canadian dollar
GBP — British pound
JPY — Japanese yen
AUD — Australian dollar
CHF — Swiss franc
NZD — New Zealand dollar
Forex currency symbols are always three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country’s currency

When does Forex trading occur?

The first session, which is the Tokyo Session, begins each week on Monday morning in the Asia-Pacific region which is Sunday evening in the Americas. Trading continues non-stop moving into the London Session and on to the New York Session until all markets close on Friday afternoon.
Most retail forex transactions have a settlement date when the currencies are due to be delivered. If you want to keep your position open beyond the settlement date, you must roll the position over to the next settlement date. Some dealers roll open positions over automatically, while other dealers may require you to request the rollover. Most dealers charge a rollover fee based upon the interest rate differential between the two currencies in the pair. You should check your agreement with the dealer to see what, if anything, you must do to roll a position over and what fees you will pay for the rollover.

What Are the Advantages of trading forex ?

1) High liquidity. (i.e. an opportunity of reception under the transaction of money, instead of the goods). The market on which money are assets, have highest of all possible liquidities. This circumstance is powerful attractive force for any investor since it provides to him freedom to open and close a position of any volume.
2) Efficiency (a 24-hour market). The main advantage of the Forex market over the stock market and other exchange-traded instruments is that the Forex market is a true 24-hour market. Whether it’s 6pm or 6am, somewhere in the world there are always buyers and sellers actively trading Forex so that investors can respond to breaking news immediately.
3) Cost. Forex market. traditionally has no commission charges, except for a natural market difference (spread) between the prices of a supply and demand.
4) Avoiding instability problems. Because of high liquidity of the market the sale of practically unlimited lot can be executed on a uniform market price.
5) The margin size. The size of credit “shoulder” (margin) in Forex market is defined only by the agreement between the client and that bank or broker firm which provides to him an output on the market, and makes 1:33, 1:50 or 1:100, for example. On Forex market the traditional size of “shoulder” 1:100, i.e., having brought the mortgage in 1000 dollars, the client can make transactions for the sum, equivalent 100 thousand dollars.