Tag Archive Foreign Exchange

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What is Forex Spread?

What is Forex Spread?

 

capital forex, forex, invest, investment, trade, traders, money, monetary, foreign, excahnge, buying, seller, forestfx, spread, forex spread, SPREAD TRANSITIONALThe difference between the purchase price (ask) and the selling price (bid) of currency pairs / parities (the ratio of currencies) is called spread. The difference between buy-sell prices is measured in pips. Pip is the change on a piece of paper, and most parts represent the 4th step change (1 pip = 0,0001).

 

There may be differences between the brokerage houses offering brokerage services in Forex markets and products from the market. Spreadler may show intraday variability depending on the liquidity in the market. These spreads, which are called dynamic spreads (spreads), may narrow at times when liquidity is high and may expand at times when liquidity is low. Some brokerage houses also have a fixed spread application. Brokerage houses usually do not get commission on Forex market transactions, and the income they earn is within these spread rates.

 

WHY SPREAD RATE? How is SPREAD TRANSITIONAL?

Forex spread ratios are not fixed because they are based on prices given by large banks and may decrease or increase according to market conditions.

 

capital forex, forex, invest, investment, trade, traders, money, monetary, foreign, excahnge, buying, seller, forestfx, spread, forex spread, SPREAD TRANSITIONALFor example; In the EURUSD parity, the selling price is 1,1356 and the selling price is 1,1354, the spread will be 2 pips. Assume that you open a position in the buying direction at a price of 1,1356 in the EURUSD size of 1 lot (position size 100,000 EURO = 113,560 USD). When you open the position, the selling price will be 1,1354 due to the 2 pip spread in between and will appear as * 100,000 = -20 USD in the profit / loss column (1,1354-1,1356). That is, the position will start to run out of proportion to the spread rate. When the selling price rises to 1,1356, your position will be at the beginning and the profit / loss situation will be 0 (zero).

 

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FIBONACCY WHEN RANGE IN WHICH?

forex,forexfx,fx,invest,investfx,investment,fibonacci,trade,tradefx,trader,money,monetary,financial,assets,earnmoney,earn,exchange,foreign,foreignexchange,buying,seller,currency,monetary,policyFIBONACCY WHEN RANGE IN WHICH?

The only variable in the analysis methods mentioned above is not the price. The time variable should also be examined extensively. In this context, Fibonacci Sequences can be used in price changes as well as in time intervals. When time intervals are set, the figures in the Fibonacci Series are bases in days, that is, they are divided into trend day intervals of 1-1-2-3-5-8-13-21-34. This analysis is used to determine the duration of the fluctuations.

 

WHAT ARE FIBONACCI BANS?

The Fibonacci Arcs are formed by the reference line drawn at the ceiling level from the trend base level observed by the parity. Fibonacci arcs are called springs that are plotted at the 81.8%, 50% and 38.2% levels of this line.

In the Fibonacci Arcs analysis method, if the price is getting closer to the pedestrian, the support is interpreted as resistance if it approaches from below.

 

WHAT IS FIBONACCI FANS?

Another use of the Fibonacci Sequence in financial analysis is the Fibonacci Fan Lines.

As we mentioned in other Fibonacci Analyzes, a guide line is drawn on the base and ceiling points in Fibonacci Fans. This guideline should be drawn to the ceiling point of the intermediate trend rather than the main trend.
Fibonacci FAN Analysis is not a straightforward method of analysis. This is because of the increase in the margin of error in volatile markets or periods. For this reason, it is recommended to apply it in more stable stabilized markets.
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What is Fibonacci Series?

What is Fibonacci Series?

 

The Fibonacci Sequence is a series of numbers obtained by summing each number by its previous number. The feature of the numbers in the Fibonacci Dice is that the numbers in the Fibonacci Sequence are proportional to the previous ones and that the series is approaching the golden one.

 

The Fibonacci sequence does not have to start with the number 1. It can start with any number.

For example, 0-1-1-2-3-5-8-13 is a Fibonacci Sequence, but may also continue as the Fibonacci Sequence, 4-4-8-12-20-32-52-84.

 

Why is Fibonacci Series called Fibonacci Series?

The Fibonacci series was found by Leonardo Fibonacci. Leonardo Fibonacci, born in Italy, discovers these numbers when he searches for a problem and decides to give his name.

 

 

Why is Fibonacci Series so Important?

Fibonacci Series As we have mentioned in the title, the numbers

in the series are  divided  by the number of the previous  number and the number of the gold is  approached within  the objects of

our lives and these numbers are important a nd mysterious. The golden  ratio   found in the  Fibonacci Series is  found in ancient Egyptians. The Greeks, like the  Egyptians, used this number in architecture. To put it simply,

The geometric orbital between the parts that make up the whole.

If we try to explain Fibonacci Sequence with examples from our daily life,

The ratio of our index finger to the previous node is the golden ratio.

 

The rate of gold we can reach with the Fibonacci series also arises from the proportion of sensory organs in the human face.

For example, the area of ​​our ears, from under the nose to the jaw, contains the golden ratio.

In Egyptian pyramids, the ratio of the base to the height gives the golden ratio.

 

USE OF FIBONACCIR DESIGN IN THE FINANCE SECTOR

FIBONACCI CORRECTION LEVELS (RETRACEMENT)

The Fibonacci series is used in the financial sector to estimate the value of the receivables of financial assets. The Fibonacci Sequence used in technical analysis applications is the gold bulb that we can reach. Generally used rates are 1.618 and 1.232.

 

E.G / Let’s consider a parity that has seen the lowest price of 1.0520 and the highest price of 1.1376 on the basis of time.

When we subtract the high price from the low price, 1,1376 – 1,0520 = 0,0856. If we hit this value with 1.272 above, it will be 0.0856 * 0.232 = 0.0198. When we add this value to the high price of 1.1376, it will be 1.1578. This emerging value reveals the trend we expect to see the parity rise.

 

As can be seen from this example, it can not be expected that the movement of a parity in the financial sector will be uninterrupted. The Fibonacci Series provides analyzes that can help in determining this trend.

Another use of the Fibonacci series in the financial sector is Fibonacci Time Spans.

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What is the index?

What is the index?

The stock market index is a value that contains certain stocks and is the result of calculating these stocks with different weights. The weight of each feeler in the index value varies.

 

The most active stock market indexes in terms of transaction volume in the world are Dow Jones, Nasdaq, S & P500, Ftse and Xetra Dax. In Turkey, there are more than one index under the Istanbul Stock Exchange. The types of indices / indexes that the most transactions are realized in stock exchange Istanbul; BİST 100 index, BİST 30 index and BİST Banking index.

 

ENDEX CALCULATION

 
Stock market indices are calculated according to the weights of the shares held.For example; In the Dow Jones 30 index, there are 30 active stocks. Some of these shares; Goldman Sachs, Microsoft, Pfizer, et al. The shares in the index are revised with certain periods, and the addition of indexes or additions of indexes is carried out.
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What is a Micro Lot?

What is a Micro Lot?

Increasing trading volume in Forex markets plays an important role in the processing of more players in forex markets by attracting interest to professionals and / or institutional investors as well as to those with different expertise and / or lower guarantees. Leveraging trades on forex markets leads investors with low collateral to get higher profit / loss due to leverage.

 

While trading in Forex market positions, such as BUY (BUYING) or SELL (SELLING) trading in USDTRY, the Meta Trader 4 trading platform, QNB Finansinvest trading platform, which uses more than 90% of all FX institutions worldwide, The position can be opened in various sizes starting from the volume. If the number of digits, called digits, is two, and the last digit is different from zero (0,01), this is called a micro lot. Thanks to the micro lot application, it is also possible to open position sizes of 0.02 / 0.13 / 1.27.

 If the transaction volumes are written as 0,10 / 0,20 / 1,50 / 2,70, ie the last digit (second digit after the conviction) always remains zero then the mini lot application is meant here. This means that the minimum lot size that forex traders can use is not a micro lot but a mini lot.

 

Micro Lot Size; 0.01 Lot = 1,000 br. In other words, if the position is to be bought in USDTRY, a position is opened with a base exchange rate of US $ 1,000 in the initial currency. If the size of the position taken is, for example, 1.56 lots, then the position is set at $ 156,000.

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What is Rectangular Formation?

What is Rectangular Formation?

 

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.

Conversely, it is also possible to create a graphic which starts with a withdrawal from the resistance level.  Rectangular graphic formation
occurs  when  the  prices are at  least  twice the level of support and
twice the level of resistance, in other words the formation of at least
four movements.  It is not possible  to talk about the  formation of a
rectangle if the prices move to any side breaking the level of support
or resistance before the completion of the four movements.

 

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.

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WHAT DOES THE DEVELOPMENT SAMPLES HAVE?

WHAT DOES THE DEVELOPMENT SAMPLES HAVE?

 

For example; Egypt had serious pressure on the exchange rate due to the fall of the US dollar to the black market. The rise of the black stock market had serious consequences for Egypt’s domestic production and investments. For this reason, Egypt devalued its currency by 14% against the US dollar in March 2016.

 

After the devaluation, the Egyptian stock market showed very serious rises, but against it the black market forced the Egyptian central bank to take more precautions. On June 12, 2016, the Egyptian bank once again devalued the value of the Egyptian Pound against the US dollar.

 

Another example of devaluation is China. China, which is experiencing serious problems with the credit market and economic contraction in 2015, has devastated Reminbi, the local currency. China, repeating this devaluation movement several times over the course of the year, warned China that it intervened with the US on monetary policy instruments on global trade. By devaluing the countries’ currencies, trying to gain advantage in global trade and being advantageous in exports is seen as the main cause of currency wars.

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What is devaluation?

What is devaluation?

 

 

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.

 

 

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What is Support Resistance?

What is Support Resistance?

 The concepts of support and resistance are not just forex markets, but a concept of technical analysis that is used throughout financial markets. In general, support can be explained as the level at which prices are expected to decline. The persistence of sales in the financial market at support levels is interpreted as the response of buyers at this level. However, it should not be forgotten that in the case of breakdown of important support levels, that is, if downward support points are crossed, sales will accelerate and the support point will become a point of resistance. Breaking a support point does not mean that the support level is below the support level. We can say when a level of support is broken, clearly when it closes below this level. When we look at the historical charts in Forex markets, the first multiplier is the support level where the sales are stopped and the prices can not fall further below this level. At these price levels, the Euro dollar pair has found support, as can be seen from the levels indicated by blue in the chart below. Below you can find examples of euro usd support resistance level.

 

 

The concept of resistance can be explained as the level at which the rise in prices is expected to cease. Resistance levels are interpreted as a stop or slow down in the financial situation, the sellers reacting at this level, or making profit realizations. When we look at the historical charts in Forex markets, the first multiplier is the resistance, the places where purchases are stopped and the prices can not go further on this level. However, it should not be forgotten that in the case of breakdown of the major resistance levels, that is to say, if the upward resistance points are crossed, the receptions will accelerate and the resistance point will now become a support point. Breaking a resistance point does not mean that the resistance level is above prices. We can say when a level of resistance is broken, clearly when it closes over this level. When we look at the historical charts in Forex markets, the first multiplier is the resistance, the places where purchases are stopped and the prices are not even higher on this level. At this price level, you will encounter a gold-level resistance level, as shown by the levels indicated by blue in the chart below. Below you can find examples of gold support resistance points.

 

 

The positions of support and resistance you will draw on the charts will indicate where you should place your profit taking and loss stop orders. Support and resistance lines do not give you information or direction about the trend. If you have just made a purchase, it will show you where to close that position. If we go through the above example; Gold position and if the prices are rising, the place to meet the first resistance will be the level of 1266 dollars ons. If this level can not be overturned, you can realize part of your position and consider buying again from the support level below (if you think the trend is up).