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What is Pip, Tick?
What is Pip, Tick?
In Forex markets, pip is the smallest price step. The full opening is point in percentage. In the majority of the parities, one pip is one tenth of the price of the corresponding currency pair. The concept of pip is often used in profit / loss calculations or spread calculations in forex markets. The concept of pip is also expressed as tick in forex transactions. Tick is also the last step in the price.
PIP CALCULATION – TICK CALCULATION
QNB Finansinvest The spread between the buying and selling prices of the forex traders trading on the Metatrader 4 platform is called spread. This difference is calculated in pip. If you need to go through the following screen display; The 0.00003 value resulting from 1.12195 – 1.12192 is read as 0.3 pips.
Tick is 3 ticks. Some of the instruments traded on the Forex market are priced at 5 digits, so the last house is ticked. For example, suppose gold prices are 1380.20 – 1380.40. In this case the difference between the two prices is specified as 0.20 pips and 20 ticks.
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What is Parabolic SAR?
What is Parabolic SAR?
The parabolic SAR is a display that is used by investors to analyze the view as soon as possible, giving information on when to buy. Parabolic SAR indicator, requiring the bid market to offer bidirectional processing capability. SAR stands for “Stop and Reverse”, ie “stop and reverse position”.
Indicator graphs calculated from the lowest and highest price levels in the relevant periods. Points are indicated. As can be seen in the graph below, if the price levels are down, the trend is up, ie, the AL signal is TRAND lower than the price signals.
In other words, the points are not laid beneath the graph, they are offered for sale when the sales points are closed..
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What is a Parity? How is a Parity Calculated?
What is a Parity? How is a Parity Calculated?
In its simplest terms, the parity refers to the ratio of country currencies. The interest rates of the country currencies and the economic conditions they are in can be counted as factors affecting the parities. For example, in terms of Turkey’s foreign trade balance, EURUSD (Euro Dollar parity) is a big part because of the fact that most of the exports are in Euros and most of the imports are in US dollars.
HOW CAN THE PARITY BE CALCULATED?
Euro: 3 TL Dollars: 2 TL and Euro Dollars 3/2 = 1.5. In this case, the Dollar will be 2/3 = 0.66.
An investor who bought EURUSD (long position) will have sold USD in exchange for the EUR bought; sale (Short Position) will make it sell Euro and receive US Dollars.
EURUSD parity (Euro / US Dollar), USDJPY (American Dollar / Yen), GBPUSD parity (Sterling / US Dollar) and AUDUSD (Australian Dollar / US Dollar) are among the top paratels that are traded on Forex markets. In addition to these, the USDTRY parity (US Dollar / Turkish Lira) and EURTRY (Euro / Turkish Lira) are also included in Turkey.
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Shoulder Head Shoulder Formation
Shoulder Head Shoulder Formation
The shoulder – head – shoulder formation is a technical anazliz formation which indicates the end of up trend and symbolizes the trend change when it occurs. Shoulder to shoulder formation is frequently encountered in technical analysis and reliability is at the top of high technical formations. This formation is one of the trend reversal formations with a high degree of reliability. It shows that a rising trend is coming to an end and a falling trend will begin.
It is necessary to observe an upward trend formation before the formation. Secondly, the left shoulder should form the peak of the rising trend and a slight withdrawal from it should be observed. The heading level (with still being up-trending) should form the summit and there should be a slight recoil and a rise again for right shoulder formation. The lower levels of the two shoulder points, referred to as the neckline along with the fall after the right shoulder, are in support position. For the formation to be valid, the neck line must be broken down with the volume. With this accomplishment, the target point can be calculated by appending the distance between the neck line and the head, down the neck line.
Prices start to rally as SHS begins to occur. With a small correction movement following the ascension, the chart
makes a hill and the LEFT SHELL occurs first. Then the ascension continues. The upward movement starts again
with the purchases from the region where the withdrawal
has ended and the prices pass to the level of the left shoulder forming a bigger hill and the HEAD forms. After the head has been formed, prices are withdrawn to support at the first shoulder level. This level of support is called ” Neck Line ”.
With the reception from the neckline, prices move upward for the last time to form the RIGHT OMG. The right shoulder occurs at about the same level as the left shoulder. After the right shoulder is completed, the neck line is broken with the strengthening of the sales, the formation is completed and the ascending trend ends with the shoulder head shoulder formation. It is expected to retreat as long as the neck line and the length of the second hill forming the head by the impact of hard sales after the break.
The neck line is very important in shoulder head shoulder formation. The line of support / resistance to which the formation is approved and the trading profits are given. The neck line is drawn by combining the points on the left shoulder and the head area that support sales. It does not necessarily have to be horizontal, it can also be down or up. The neck line breaks downwards and then goes back to the neckline giving a second opportunity for sale.
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What is Momentum?
What is Momentum?
The momentum is an oscillator that represents the change in parities over a predetermined period of time. In other words, it is a display that indicates how much the corresponding parity has gained or lost in a specified period of time.
Momentum is a market anomaly that finance theory is difficult to explain. The fact that the price of any financial product is rising does not guarantee that prices will rise in the future. According to the effective market hypothesis, the increase in prices and the changes in demand and demand are determined by new information coming from the financial market.
The momentum indicator is calculated as follows;
Momentum = Last Closing / x Days Previous Closing * 100
How to interpret the momentum indicator?
The momentum indicator is interpreted in two ways:
Method; it is possible to use it as a trend monitor. When the indicator bottoms up and turns up, AL should make a peak at the indicator, and when it goes down, the SAT should be decided. You should keep in mind that when the momentum indicator has a new peak or dip (compared to the peak and past in the past), the current trend will continue, but the rate of increase in prices slows down and the effects of senescence factors are weaker and prices may begin to fall after a while. Nevertheless, you must change the position of the signal produced by the indicator, waiting for the price movement to confirm it.
For example, the indicator peaked and turned, and you should wait for prices to fall.
The Method Momentum indicator can also function as an indicator of the future. When prices are rising and new peaks are made, the show can not do the new peak or the prices do not bottom out when the new bottom. In this case, incompatibility occurs and it is necessary to evaluate it as an early signal of the trend change.
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What is Margin?
What is Margin?
One of the most used terms in the Forex market, along with terms like leverage, lot, is the margin. Margin is a frequently asked question and is often confused. Margin, which means collateral, is used in the forex market together with different terms. While the amount used when opening a position is called the initial margin (initial margin), we can see how much more we can open the position by looking at the free margin (the free margin).
How does FOREX MARGIN LEVEL CALCULATE?
Margin calculation, in other words margin level, is one of the important points to be considered in the forex market. We find margin level by comparing asset / free margin. When this level reaches below 75%, the margin call-margin call comes in. When the level reaches below 50%, the system automatically closes our positions, starting with the most harmful position. It is not compulsory to provide margin when the margin call warnings are received in Forex markets.
WHAT IS FOREX MARGIN CALL? MARINE CALCULATION SAMPLES:
As an example, let’s imagine that we have 5,000 USD in our account and we will do our work using 1/100 leverage. We decided to do 5 lot USDTRY long (long) trading. The initial guarantee for this transaction is 5,000 USD. If this is not the case then the free margin will be 0. If we open this position and we do not like the margins, it is 100%.
Now; If the USDTRY price moves in the opposite direction to the position we opened and the margin reaches 75 percent, we call margin completion, which is called margin call. This means that we should follow our position more closely, because if the margin is below 50% we will automatically close our position by the electronic trading platform MetaTrader4.
FOREX STOP OUT WHY? STOP OUT CALCULATIONS:
Stop out concept in Forex markets; a situation in which a certain percentage of the collateral used remains. In other words, it can be explained as Asset / Used Collateral. To give an example; Suppose we open a position with a 1,000 USD balance and 1,000 start-ups. In this case, our Asset / Used Margin ratio will be 100%. QNB Finansinvest has a stop out level of 50%. In our example above, if our asset, which is $ 1,000, drops to 500 USD, Asset / Used Margin will be 50%, and our most damaged position will automatically stop.
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What is the MACD Indicator?
What is the MACD Indicator?
The MACD indicator is a trend indicator and a momentum indicator that shows the relationship between prices for two different moving averages. Basically, the 26-day exponential moving average is obtained by removing the 12-day exponential moving average. The MACD indicator uses an in-line signal line and is used as a trigger for sales signals. The MACD demonstration was developed by Gerald Appel in the 1970s.
How is the MACD INDICATOR INTERPRETED?
The use of 3 of the MACD indicators is an important and widely used interpretation method.
Intersections: When the MACD indicator falls below the signal line, a signal may indicate that a signal has arrived or that the sales clock has arrived. If the MACD indicator rises above the signal line, this upward signal is generated and the appearance of reception levels is marked. Many investors are waiting for the intersection level to be able to avoid false signals.
Disaggregation: If the price of a financial product differs from the MACD indicator, this current trend is over.
Abnormal Aspects: If the MACD indicator rises abnormally, it is displayed that this short-term moving average pushes up the average to the length. This indicates that the related financial product is in an overbought territory and will shortly return to normalcy. For investors also to underline the bottom border and lines. While the MACD indicator is above the zero line, it is on the short-term long-term average and indicates that upward movement may continue. The bottom of the zero line is the exact opposite of this.
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What is Leverage?
What is Leverage?
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.
LEADER FOR FOREX
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.
RIDDLE OPERATIONS RISK? FOREX TRANSACTIONS RISK?
Forex markets have high leverage ratios from time to time investors “hurry to forex risk a lot? “May be bringing the question to mind. However, leverage ratio and risk concepts may not be directly proportional to each other. To explain with an example; Mr. Sam opened a forex account with a leverage ratio of 1/1 to open an initial bond of 100,000 USD and wants to open a USD 100,000 position in USD / TRY.
To do so, he has to use the entire initial deposit to open up one lot (100,000 USD) position on the MetaTrader4 platform and there is no free back guarantee. However, if Mr. Sam had opened the forex account by choosing the leverage ratio of 1/100, then in order to open another 1 lot (100.000 USD) position, one thousand USD (100.000 / 100) bond will be left out of the initial 100.000 USD and the remaining 99.000 USD free guarantee , that is, security.
One of the well-known mistakes about leverage is high leverage = high loss. Actually, that’s not really the case. If we continue with the above example, the profit / loss of 1 lot position would be the same as if we had 1/1 leverage and 1/100 leverage with 1 lot position profit / loss received by Mr. Sam who opened forex account with leverage. The leverage does not affect the profit / loss to be less or greater, but only determines whether the initial margin is more or less.
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.
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What is Dual Dip and Double Tepe Formation?
What is Dual Dip and Double Type Formation?
DOUBLE TYPE – DOUBLE TYPE FORMATION
The formation, which is called double hill or double hill, is assumed to be the news of technical analysts coming to the end of a strong upward trend. With the return from a significant peak level, investors who have not been able to participate in the movement will rise again and the market will go up to a level close to the previous level, but the hard selling experienced in the previous hill also becomes an important resistance, this reluctance to withdraw the prices back to the level of support occurs.
DOUBLE DIP – DOUBLE DIP FORMATION
This formation is the opposite of the double top formation. The amount of volume in this formation, seen at the end of the downtrend, is high when the first dip is formed. In response to the first dip, the volume remains lower. From the second dip, the transaction volume increases with the price. In these formation graphs, the binary top formation resembles the letter W, which is the inverse of the letter M, which is the shape of the figure. Just as it is in a double hill formation, this formation is usually assumed to be longer than one moon.
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What is Ichimoku?
What is Ichimoku?
The ichimoku indicator, also known as Ichimoku clouds, is an indicator that helps identify support, resistance and trends in financial markets. This indicator, also known as Ichimoku kinko Hyo, is also known as “equality graph”. With a single image, trending and trending potential signals can be seen. Indicator was developed in 1969 by Japanese journalist Goichi Hosoda. It is actually a useful and simple indicator even though it looks very complicated when you look at the graphs.
Ichimoku In order to understand what the index is, Ichimoku Kinko Hyo analysis will be useful in describing what the terms mean, because we will keep track of these terms on the graphs continuously.
- Tenkin Sen: 9-period moving average is the default value.
- Rigged Sen: 26-period moving average is the default value.
Moving averages help me find where the nearest support and resistance levels are.
Naturally, the first level of support will function if the 9-period moving average prices in the emerging market are closer to that of a retreat. The 26-period moving average, which follows the prices further, takes on the next support function. The same rules apply for the declining market.
- Senkou Span A: It is obtained by dividing the 26-period moving average by 9-period moving average and dividing it into two, then shifting the obtained value by 26-period forward. Senkou Spana acts like a weighted average of 26 periods.
- Senkou Span B: is obtained by dividing the highest and lowest values in 52 periods by half, then shifting the obtained value by 26-period forward. In other words, Senkou Span B is the middle point of 52 periods (50% withdrawal rate).
* Ichimoku Cloud: The area between Senkou Spana and Senkou Span B.
If prices are able to penetrate the cloud and penetrate the cloud, the trend is predicted to continue in that direction. In other words; falling down the parity cloud, ascending the parity cloud, the ascension current begins to dominate.
The thickness of the clouds is also an important point. The cloud is thicker than the support (or resistance) in the region; we can say that the cloud is thinner than the support (or resistance) in the area where it is thin. Currents are more likely to change direction at these points.
- Chikou Span: Obtained by shifting the closing price back by 26 periods. It is a default value, but can be changed if desired.