Buyers & Sellers

Hi, guys..

So last post i wrote about what is "FOREX" . I hope you guys understand something from my previous post.

so Today i would like to write about ... ... ... ... ... ... ...

about what?

Maybe you guys wondering how can we know the market reach 1 point where we certainly it will bounce . What? bounce? what is that?

Let's look at the above figure, we look it from left side to right side alright?

The first zone i marked blue line at the bottom & red line at the top, with the A, B, C, D.

Remember that we need to look from left to right? This is because the price move from past (Left) to present (Right).

From point A  to point B to point C and to point D.

The bounce is refer to how A can reach C. Which is through B. Agree?
So the point B is the bounce point aka turning point.

you good fellas?


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How Does The Market Move?
Good question.

1 Thing for sure, there are a lot of factors.

1 of them is what we called Buyers & Sellers.

okay, ask yourselves.

When you open a shop. How you define your business is doing good?

Yup, a lot of customers come and buy stuff from your shop right? So you will be making a lot of profit.

and when there's no body is coming, and yet the suppliers keep coming and force you to pay for the goods in advance, is this good? your profit will drop!!

When the rate of customer is higher than the rate of supplier coming, your net profit is growing UP.
When the rate of supplier is higher than your customer, well...enough say...your net profit is

DOWN!

It goes the same with the currency market. If the shop have customers and suppliers as buyers & sellers,

What drives FOREX market?







I will continue in the next post of who drives the FOREX market.



Thanks a lot guys!
Regards.

The New Challenge.

Hi guys, Naz here.

I decided to create a blog based on my technical analysis view on FOREX market. What is FOREX?

FOREX is a short term of FOReign EXchange.

Like how we went to money changer to convert our RM4.20 for 1 USD, thats forex.

Imagine when the rate is RM3.20 at that time. You convert 1000 USD with RM3200.

Now that the rate goes up to RM4.20, you decided to sell your 1000 USD.

So, you will get RM4200. hmmm..does that mean I gained RM1000!!!??? (RM4200 - RM3200)

Yes you are RIGHT!!!

wow~~~~ you just earned RM1000.

That's pretty much how FOREX works. the only thing that different is, you go to money changer and wait for like, 6 months to let the rate goes up ; i on the other hand, i can make it within 1 month time.
(Pro will be like within a day they can easily earned 4digits) ---> im no pro.

so, how can i earned that within a month time?

this is a chart of euro pound versus US dollar within a month.

if you noticed the chart in dotted line, initial and end price is also the same value. in blue circle below. connected with blue line.

so we can see at 1st August until 1st September, It has movement up and down before go back to its original price from 1st August.

from 1st August, price at 1.11744 , went down to 1.10453 within 1 week time. that mean,

at 1st August, 1 euro pound = 1.11744 usd. (Yup, every 0.001 cent was count in FOREX)

and later at 5th August, 1 euro pound dropped to 1.10453 usd.

in eye of usd, when i invest 1000 euro pound at the price of 1.11744, i invested 1117.44 usd;

somehow it dropped to 1.10453 which leads to 1104.53 usd,

i've lost my money on that investment!!! (lost 12.91usd actually)

BUT,

in eye of european,

they invest 1000 usd (894.90 euro pound) @ 1.11744 on 1st August,
on 5th August, the rate drop to 1.10453, which is 905.36 euro pound, later they sell back their 1000usd. which they had just earned 10.46 euro pound or equivalent to 11.55 usd.

overall, that's how the FOREX market work daily, weekly, monthly.

on the 2 weeks following, the euro strengthen from 1.10453 to 1.13674. total of 3.221 cent.

imagine you invest 1000 euro at that time, you have earned another 32.21 usd.

and the final week, you invest in 1000usd, you earned 27.06 usd.

brings you total of 70.82 usd at that month.

But wait,

how is that possible to earn 1000usd in a month like i said?

FYI, a forex market unit price is $10,000 - $100,000.

A unit price of $100,000 allows you to move 0.01 cent equivalent to $1. which means, when the market move total of 0.50 cent, your unit price earn/lost $50.

Well, we dont have that much of money, even $10,000 man.

That is where broker steps in (a broker is act like a bank which allows you to open forex account and invest in their platform). They offered you leverage to trade as full contract size ($100,000), with minimal capital.

let say just now we have 1,000 usd, and the broker gave you a leverage which equal to $100,000,
$1,000 is equal to 0.01 of $100,000. with the leverage of 1:100, you will be able to trade/invest as full contract size.

now lets re-do the situation of profit above. now that we have contract of 1 unit price, this means every 0.01 cent movement, we are going to +$1 / -$1.

lets recalculate,

1 : 1.11744 - 1.10453 = 0.01291 ~ 1.291 cent movement
2 : 1.10453 - 1.13674 = 0.03221 ~ 3.221 cent movement
3 : 1.13674 - 1.11241 = 0.02433 ~ 2.433 cent movement

Total cent movement = 6.945 cent movement

0.01 cent = $1
6.945 cent = how many $ ????

694.5 USD!!!

in 1 month time, you have earned almost 700USD!!! well, there's secret how you can move from 700usd to 1000usd.

within 1 month you can almost earn back what you've invest. imagine if you consistently earn 700usd a month for 6 month. how would it end up?

this is how FOREX work basically. you can earn both way as euro or usd.

HOWEVER!!!

This need knowledge to do so, FOREX is not a game, you need skills, knowledge, and technique to master it.

"Success is dependent on effort"

If you have what it takes to become a pro trader, that's the secret how you can manage from 700usd to 1000usd.

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Thats all for now shall we.

Till next time,