The volatility, which began at the beginning of the 1970s with the end of the Bretton Woods agreement, allowed swap-like derivatives to pass over. With the contribution of technology that develops day by day, besides banks and similar financial institutions, individual investors have the opportunity to trade easily with very narrow spread ratios in leverage derivative markets when it comes day by day. Starting in 2012, the forex markets in Turkey, which have developed especially in the last 10 years, started to be monitored by financial institutions providing the opportunity to trade in forex markets under CMB regulation, and interest of big and small investors who want to take advantage of the opportunity of higher volume transactions by leverage ratio started to increase.
Let’s go over an example to clarify the concept of “leverage” that is often used in Forex markets and seen as a risk factor
by investors. Suppose that Mr. Collin, who opened a forex account at Finance online FX with a leverage ratio of 1/100, deposited $1,000 as his initial deposit. The maximum position size that Mr. Collin can open with this guarantee is 100.000 USD (1.000 x 100). The maximum position size should be underlined here. Because of the trader’s trading platform,
the nominal size of the position opened on the order screen can also be seen, as is the value in lots. If Mr. Collin is trading in the USD / TRY range on MetaTrader4 platform, one of the most frequently used trading platforms for forex markets, he will open the 1 lot position by selecting the field “1” in the order screen. The nominal size of the position it opens is also 100,000 USD. Now, Mr. Collin’s account of 1,000 USD increases or decreases to include the profit or loss of a USD 100,000 position in the USDTRY price per pips rise / fall.
LIMITATIVE PROCESSING SAMPLES
As we can see from our examples, we can open a high volume position with low leverage. The risk here is that investors should use high leverage to open up more positions. That is, if Mr. Sam continues to open positions with high lot ratios by saying that he has left 99,000 USD behind the 1 lot process that he has opened using 1/100 leverage, then the leverage ratio may start to pose a risk for investors. However, if Mr. Sam continues to take action in the direction of the strategies he has created and take his risk appetite without taking another position or open a limited position, he may wait for USD / TRY to keep his position for a long period of time, even if he anticipates moving. Forex markets and leverage opportunities can be a risk factor because the amount of money earned is directly proportional to the risk involved. However, adjusting this risk level is entirely at the discretion of the investor.
Moving averages are used in most of the indicators used in forex markets.
For example; bollinger bands, MACD, and ichimoku.
The moving average is a display that is calculated by taking the average of prices. Moving averages are accepted as an important indicator in terms of trend follow up. The reason for this is that the moving averages consist of past price movements. Moving averages also assist in determining support and resistance points.
For example; The 200-day moving average is heavier than the 20-day moving average and indicates a more delayed forecast. Short-term moving averages are used by short-term traders and long-term moving averages are used by long-term investors.
The 200-day moving average, which is often used by investors, is closely monitored as a significant signal and support resistance level. In some cases, moving averages with more than one time interval are used together to obtain an opinion on the direction of the market
Two types of moving averages are frequently used in Forex markets.
Weighted Moving Average: Moving average of a financial product, calculated by taking the average of the price movements within the determined period according to the determined weights.
Exponential Moving Average: Moving average of a financial product, calculated by taking the average of the price movements in the determined period and giving more weight to the price movements in the near term. Since weighting is performed, the exponential moving average is counted as a moving average with less delay.
As the time spent in moving averages increases, the delay is more frequent.
For example; Looking at the 10-day moving average, the delay is less because it takes into account the more recent prices.
Moving averages, which are common in technical analysis, are more effective when used together.
For example; The 50-day moving average and the 200-day moving average produce interlaced technical analysis signals. Generally, the combination of the short-term moving average and the long-term moving average gives better results. The upward-sloping short-term moving average long-term moving average is signaling that prices may move upwards in the short-term. In the literature this “golden cross” is known as “golden cross”. On the contrary, if the short-term moving average cuts down the long-term moving average, it generates a signal that prices can move downward. This “death cross” in the literature is referred to as “dead cross”.
Rectangular graph formation occurs when prices are touched by both levels for a period of time between support and resistance levels.
These levels of support and resistance can be horizontal, as well as down or up-view channels. What is important here is not that the support and resistance levels are in the form of horizontal or up / down channels; Are parallel to each other.
The formation of the rectangle starts with the price movements rising from the support level, then comes back to the support level again after reaching the level of resistance and then completes by making a movement towards the resistance level again.
The entry point to the position is determined according to which side of the price will break after the completion of the fourth movement. The target price level is the distance between the support-resistance levels that form the rectangle, up or down, from the fracture level.
Devaluation is a monetary policy tool used by countries that implement a fixed exchange rate regime or a semi-fixed exchange rate regime. Devaluation is the reduction of the value of an official currency of an country against other country currencies or against a group of currency values, or at a currency standard. Devaluation is often confused with depression and is exactly the opposite of revaluation.
Devaluation is a tool used by the government or central bank of the fixed country for the relevant currency. One of the most fundamental reasons for devaluation is that the country reduces the value of its money to compensate for trade deficit. Devaluation is to lower the value of currency and to make exports cheaper and become more advantageous in global trade competition. However, imports become more expensive, and domestic households increase demand for products from domestic producers while expecting a reduction in demand for imported products.
Devaluation seems to be a means of positive monetary policy, but there are also negative effects. Making imports more expensive can make domestic production less effective, or making exports cheaper can cause inflation by increasing demand very seriously.
How is the Dollar invested?
The US dollar, which is the most used currency in the world, is one of the most advantageous exchange rates for investors. Dollar For foreign investors, foreign exchange can be invested in different ways. At this point, the investor should first decide whether to invest in long term or short term. Long-term investments are like doing traditional trade. By anticipating the dollar’s movements in the long run by buying and selling dollars in the free market, the investor can convert the dollar increase in the long run. For those who want to make a short-term investment, the Forex market can be quite reasonable. In Forex, the investor can invest dollars by getting the dollar up or down during the day.
While there is no general consensus about how long the bear market will last, it is expected that prices will continue to fall for a long time. Demand for products on a market under the bear market is declining. Because demand is decreasing, nobody wants to buy those products and prices continue to fall.
The bull market, on the contrary of the bear market, shows that the related market will be on the rising trend for a long time and that the demand for the products in that market is increasing.
If gold prices were to be taken as an example, the bull market was experiencing a rising trend from the beginning of 2000s to the end of 2011 for a long time. However, in the middle of 2013, 2011 peak price level of 1900 dollars ounce of the level of 1500 ounces fell below. There was a decrease of about 30% from the previous peak level and gold prices were officially under the influence of the bull market.
The Federal Reserve is the central bank of the United States, which was founded on December 23, 1913. Over time, the roles and responsibilities of the Federal Reserve System have been expanded and changes have taken hold. Ben Bernanke, head of the central bank in Washington. The bank also has the authority to print and distribute US dollars.
The FOMC is the US Federal Reserve Open Market Operations Committee. It is the most important part of the Federal Reserve System’s monetary policies. The FOMC has important tasks such as increasing employment, keeping inflation and macroeconomic balance at an acceptable level, and taking measures to promote economic growth.
The Federal Open Market Commitee meets eight times a year to assess economic trends and determine their monetary policy. FOMC Meetings (FOMC Minutes) are announced three weeks after the FED meetings. In the meeting records; The reasons behind the decisions of the FED meetings include the FOMC members’ view of the macroeconomic outlook, the duration of economic measures and interest rate decisions, and forecasts for future periods. Investors look for clues in this long text for changes that may occur in the FED’s monetary policies.
Interpretation of FOMC Decisions
Interest Rate Decisions: Commitments to keep FED’s policy rate at certain levels are affecting the course of the US dollar and commodities. For example; A clue to the prolongation of the rate at which interest rates are held at very low levels will create a low interest-weak dollar sense. Read More
Commodity means, as a word, the name given to all commodities and products that are subject to trade.
Support You can also trade commodities such as oil, gold, silver, wheat, corn, soya bean, cotton, coffee, sugar in investment securities. There are many different dynamics that determine the prices of commodities. For example, when trading under, the factors that affect the price of gold need to be well known. Gold has been a safe port for centuries. The wars in the world have an effect of increasing the demand under conditions such as high inflation. Elements that affect corn prices when trading in another commodity such as Egypt may differ from those that affect the price of gold. The low level of corn yields in a globally drought year may cause corn prices to rise.
In petroleum, supply-side downturns create upward pressure on oil prices, causing oil prices to rise. Or the economic crises that may be experienced in countries like China and USA, which are the biggest oil consumers of the world, will push down oil demand and create downward pressure on oil prices. The slowdown in China, the second largest economy in the world, causes copper prices to depreciate rapidly. The factors affecting the commodities being processed may differ in such a way.
The first step to getting started with Forex is to do some research and get brief information about it. Foreks should learn what is right and interpret the market objectively. There will be many comments on the internet and these comments may contain incorrect or incorrect information. That’s why you should learn from reliable sources. Once you have your mind, you should call yourself an intermediary. This intermediary is the first point that you need to evaluate the legal nature of the institution.
You need to get more information and experience to get started on the Forex market. If you are looking for how and where to learn Forex, the brokerage house that you are a member of will be extremely helpful in this regard and will give you the most accurate information. This knowledge and experience can be gained by taking advantage of free training opportunities offered by intermediary institutions. You will learn from the A to Z market when you benefit from training sets in the form of Forex books, training videos, online seminars and demo accounts.
Do not forget to set yourself a goal and strategy to get started with Forex. Create an investment plan and stick to the plan. Determine from what way you will follow and move in a steady manner.