Have you ever noticed that when a certain currency pair rises, another currency pair falls? Or that sometimes when one pair falls, another pair seems to copy its movement and falls too. If the answer is yes, you have witnessed an example of a Forex currency correlation. What is currency correlation? In the financial world, [...]
The Forex market has been particularly active since the 1970s. It has become the world’s largest financial market, with an average daily trading volume growing from around 1.2 trillion in 1995 to 5.1 trillion in 2019, according to figures from the Bank for International Settlements. Although large financial institutions and banks are responsible for a substantial [...]
What a limit order? A limit order can be defined as a trading order given to the broker or dealer to buy or sell an asset at the specified price or better. As a limit order is executed only at the specified price or better, a limit buy order will be executed only at the [...]
Stop hunting is called the practice that consists in forcing the positions of retail traders, causing a movement in the price action, up or down, until the price reaches the levels where stop loss orders have been placed. This leads to stop losses being executed in such a way that retail traders are expelled from [...]
The stop loss is a trading order placed in the broker to sell or buy a currency pair (or any other asset in a financial market) conditioned on the price reaching a certain value. It is mainly used to close an open transaction in case the price direction turns against it, hence its name. For [...]
In Forex different participants trade currencies, buying and selling in order to profit from changes in the exchange rate. In this article we will see what is the exchange rate, different systems (fixed exchange rate and flexible exchange rate) and why some exchange rates fluctuate and are traded on the Forex market and others not. […]
What is liquidity? In economics, business or investment, liquidity is the ability of an asset to be converted into cash quickly without losing its value. Thus, market liquidity can be defined as the ability to buy and sell an asset without causing a significant movement of the price. It can also be defined as the [...]
A trading plan can be simple or complex depending on how you want it to be, but most important of all in the end, is that you have a plan and follow its rules. These are some of the essential points that every forex trading plan should have: 1- Trading system This is the true [...]
The Forex market is the largest OTC market in the world, according to some estimates it moves almost 5 trillion dollars a day. Specifically, in the last triennial survey of the BIS, you can observe the level of negotiation and distribution among the main currency pairs that are traded in that market. This tells us [...]
What is an indirect quote? Is the price of a currency pair expressed as amount of foreign currency per unit of domestic currency. In other words, when an indirect quote is given, the exchange rate is expressed relative to a fixed amount of the national currency (1 unit), while the amount of foreign currency is variable. For example, if [...]