Know Your P’s and L’s

Here is where we’re going to do a little math. You've probably heard of the terms "pips" and "lots" thrown around, and here we're going to explain what they are and show you how they are calculated.

Take your time with this information, as it is required knowledge for all Forex traders. Don’t even think about trading until you are comfortable with pip values and calculating profit and loss.

What the heck is a Pip?

The most common increment of currencies is the Pip. If the EUR/USD moves from 1.2250 to 1.2251, that is ONE PIP. A pip is the last decimal place of a quotation. The Pip is how you measure your profit or loss.

As each currency has its own value, it is necessary to calculate the value of a pip for that particular currency. In currencies where the US Dollar is quoted first, the calculation would be as follows.

Let’s take USD/JPY rate at 119.80 (notice this currency pair only goes to two decimal places, most of the other currencies have four decimal places)

In the case of USD/JPY, 1 pip would be .01



.01 divided by exchange rate = pip value
.01 / 119.80 = 0.0000834

This looks like a very long number but later we will discuss lot size.


.0001 divided by exchange rate = pip value
.0001 / 1.5250 = 0.0000655


.0001 divided by exchange rate = pip value
.0001 / 1.4890 = 0.00006715

In the case where the US Dollar is not quoted first and we want to get the US Dollar value, we have to add one more step.



.0001 divided by exchange rate = pip value
.0001 / 1.2200 = EUR 0.00008196

but we need to get back to US dollars so we add another calculation which is

EUR x Exchange rate
0.00008196 x 1.2200 = 0.00009999

When rounded up it would be 0.0001



.0001 divided by exchange rate = pip value

.0001 / 1.7975 = GBP 0.0000556

But we need to get back to US dollars so we add another calculation which is

GBP x Exchange rate

0.0000556 x 1.7975 = 0.0000998

When rounded up it would be 0.0001

You’re probably rolling your eyes back and thinking do I really need to work all this out and the answer is NO. Nearly all forex brokers will work all this out for you automatically. It’s always good for you to know how they work it out.

In the next section, we will discuss how these seemingly insignificant amounts can add up.

What the heck is a Lot?

Spot Forex is traded in lots. The standard size for a lot is $100,000. There is also a mini lot size and that is $10,000. As you already know, currencies are measured in pips, which is the smallest increment of that currency. To take advantage of these tiny increments, you need to trade large amounts of a particular currency in order to see any significant profit or loss.

Let’s assume we will be using a $100,000 lot size. We will now recalculate some examples to see how it affects the pip value.

USD/JPY at an exchange rate of 119.90
(.01 / 119.80) x $100,000 = $8.34 per pip

USD/CHF at an exchange rate of 1.4555
(.0001 / 1.4555) x $100,000 = $6.87 per pip

In cases where the US Dollar is not quoted first, the formula is slightly different.

EUR/USD at an exchange rate of 1.1930
(.0001 / 1.1930) X EUR 100,000 = EUR 8.38 x 1.1930 = $9.99734 rounded up will be $10 per pip

GBP/USD at an exchange rate or 1.8040
(.0001 / 1.8040) x GBP 100,000 = 5.54 x 1.8040 = 9.99416 rounded up will be $10 per pip.

Your broker may have a different convention for calculating pip value relative to lot size but whichever way they do it, they'll be able to tell you what the pip value is for the currency you are trading is at the particular time. As the market moves, so will the pip value depending on what currency you are currently trading.

How the heck do I calculate profit and loss?

So now that you know how to calculate pip value, let’s look at how you calculate your profit or loss.

Let’s buy US dollars and Sell Swiss Francs.

The rate you are quoted is 1.4525 / 1.4530. Because you are buying US you will be working on the 1.4530, the rate at which traders are prepared to sell.

So you buy 1 lot of $100,000 at 1.4530.

A few hours later, the price moves to 1.4550 and you decide to close your trade.

The new quote for USD/CHF is 1.4550 / 14555. Since you're closing your trade and you initially bought to enter the trade, you now sell in order to close the trade so you must take the 1.4550 price. The price traders are prepared to buy at.

The difference between 1.4530 and 1.4550 is .0020 or 20 pips.

Using our formula from before, we now have (.0001/1.4550) x $100,000 -= $6.87 per pip x 20 pips = $137.40

Remember, when you enter or exit a trade, you are subject to the spread in the bid/offer quote.

When you buy a currency you will use the offer price and when you sell you will use the bid price.

So when you buy a currency, you pay the spread as you enter the trade but not as you exit. And when you sell a currency you don't pay the spread when you enter but only when you exit.

What the heck is Leverage?

You are probably wondering how a small investor like yourself can trade such large amounts of money. Think of your broker as a bank who basically fronts you $100,000 to buy currencies and all he asks from you is that you give him $1,000 as a good faith deposit, which he will hold you for but not necessarily keep. Sounds too good to be true? Well this is how forex trading using leverage works.


The amount of leverage you use will depend on your broker and what you feel comfortable with.

Typically the broker will require a minimum account size, also known as account margin or initial margin. Once you have deposited your money you will then be able to trade. The broker will also specify how much they require per position (lot) traded.

For example, for every $1,000 you have, you can trade 1 lot of $100,000. So if you have $5,000 they may allow you to trade up to $500,000 of Forex.

The minimum security (margin) for each lot will vary from broker to broker. In the example above, the broker required a one percent margin. This means that for every $100,000 traded, the broker wants $1,000 as a deposit on the position.

What the heck is a Margin Call?

In the event that money in your account falls below margin requirements (usable margin), your broker will close some or all open positions. This prevents your account from falling into a negative balance, even in a highly volatile, fast moving market.

Example #1
Let’s say you open a regular Forex account with $2,000 (not a smart idea). You open 1 lot of the EUR/USD, with a margin requirement of $1000. Usable Margin is the money available to open new positions or sustain trading losses. Since you started with $2,000, your usable margin is $2,000. But when you opened 1 lot, which requires a margin requirement of $1,000, your usable margin is now $1,000.

If your losses exceed your usable margin of $1,000 you will get a margin call.

Example #2
Let’s say you open a regular Forex account with $10,000. You open 1 lot of the EUR/USD, with a margin requirement is $1000. Remember, usable margin is the money you have available to open new positions or sustain trading losses. So prior to opening 1 lot, you have a usable margin of $10,000. After you open the trade, you now have $9,000 usable margin and $1,000 of used margin.

If your losses exceed your usable margin of $9,000, you will get a margin call.

Make sure you know the difference between usable margin and used margin.

If the equity (the value of your account) falls below your usable margin due to trading losses, you will either have to deposit more money or your broker will close your position to limit your risk and his risk. As a result, you can never lose more than you deposit.

If you are going to trade on a margin account, it’s vital that you know what your broker’s policies are on margin accounts.

You should also know that most brokers require a higher margin during the weekends. This may take the form of 1% margin during the week and if you intend to hold the position over the weekend it may rise to 2% or higher.

The topic of margin is a touchy subject and some argue that too much margin is dangerous. It all depends on the individual. The important thing to remember is that you thoroughly understand your broker’s policies regarding margin and that you understand and are comfortable with the risks involved.

Some brokers describe their leveraging in terms of a leverage ratio and other in terms of a margin percentage. The simple relationship between the two terms is:

Leverage = 100 / Margin Percent

Margin Percent = 100 / Leverage

Leverage is conventionally displayed as a ratio, such 100:1 or 200:1.

How You Make Money Trading Forex

Make Money Trading ForexIn the FX market, you buy or sell currencies. Placing a trade in the foreign exchange market is simple: the mechanics of a trade are very similar to those found in other markets (like the stock market), so if you have any experience in trading, you should be able to pick it up pretty quickly.

The object of Forex trading is to exchange one currency for another in the expectation that the price will change, so that the currency you bought will increase in value compared to the one you sold.

Example of making money by buying Euros

rader's Action EUR USD
You purchase 10,000 euros at the EUR/USD exchange rate of 1.18 +10,000 -11,800*
Two weeks later, you exchange your 10,000 euros back into US dollars at the exchange rate of 1.2500. -10,000 +12,500**
You earn a profit of $700. 0 +700
*EUR $10,000 x 1.18 = US $11,800
** EUR $10,000 x 1.25 = US $12,500

An exchange rate is simply the ratio of one currency valued against another currency. For example, the USD/CHF exchange rate indicates how many U.S. dollars can purchase one Swiss franc, or how many Swiss francs you need to buy one U.S. dollar.

How to Read an FX Quote

Currencies are always quoted in pairs, such as GBP/USD or USD/JPY. The reason they are quoted in pairs is because in every foreign exchange transaction you are simultaneously buying one currency and selling another. Here is an example of a foreign exchange rate for the British pound versus the U.S. dollar:

GBP/USD = 1.7500

The first listed currency to the left of the slash ("/") is known as the base currency (in this example, the British pound), while the second one on the right is called the counter or quote currency (in this example, the U.S. dollar).

When buying, the exchange rate tells you how much you have to pay in units of the quote currency to buy one unit of the base currency. In the example above, you have to pay 1.7500 U.S. dollar to buy 1 British pound.

When selling, the exchange rate tells you how many units of the quote currency you get for selling one unit of the base currency. In the example above, you will receive 1.7500 U.S. dollars when you sell 1 British pound.

The base currency is the “basis” for the buy or the sell. If you buy EUR/USD this simply means that you are buying the base currency and simultaneously selling the quote currency.

You would buy the pair if you believe the base currency will appreciate (go up) relative to the quote currency. You would sell the pair if you think the base currency will depreciate (go down) relative to the quote currency.


First, you should determine whether you want to buy or sell.

If you want to buy (which actually means buy the base currency and sell the quote currency), you want the base currency to rise in value and then you would sell it back at a higher price. In trader's talk, this is called "going long" or taking a "long position". Just remember: long = buy.

If you want to sell (which actually means sell the base currency and buy the quote currency), you want the base currency to fall in value and then you would buy it back at a lower price. This is called "going short" or taking a "short position". Short = sell.

Bid/Ask Spread

All Forex quotes include a two-way price, the bid and ask. The bid is always lower than the ask price.

The bid is the price in which the dealer is willing to buy the base currency in exchange for the quote currency. This means the bid is the price at which you (as the trader) will sell.

The ask is the price at which the dealer will sell the base currency in exchange for the quote currency. This means the ask is the price at which you will buy.

The difference between the bid and the ask price is popularly known as the spread.

Let's take a look at an example of a price quote taken from a trading platform:

Forex Spread On this GBP/USD quote, the bid price is 1.7445 and the ask price is 1.7449. Look at how this broker makes it so easy for you to trade away your money.

If you want to sell GBP, you click "Sell" and you will sell pounds at 1.7445. If you want to buy GBP, you click "Buy" and you will buy pounds at 1.7449.

In the following examples, we're going to use fundamental analysis to help us decide whether to buy or sell a specific currency pair. If you always fell asleep during your economics class or just flat out skipped economics class, don’t worry! We will cover fundamental analysis in a later lesson. For right now, try to pretend you know what’s going on…

In this example Euro is the base currency and thus the “basis” for the buy/sell.

If you believe that the US economy will continue to weaken, which is bad for the US dollar, you would execute a BUY EUR/USD order. By doing so you have bought euros in the expectation that they will rise versus the US dollar.

If you believe that the US economy is strong and the euro will weaken against the US dollar you would execute a SELL EUR/USD order. By doing so you have sold Euros in the expectation that they will fall versus the US dollar.

In this example the US dollar is the base currency and thus the “basis” for the buy/sell.

If you think that the Japanese government is going to weaken the Yen in order to help its export industry, you would execute a BUY USD/JPY order. By doing so you have bought U.S dollars in the expectation that they will rise versus the Japanese yen.

If you believe that Japanese investors are pulling money out of U.S. financial markets and converting all their U.S. dollars back to Yen, and this will hurt the US dollar, you would execute a SELL USD/JPY order. By doing so you have sold U.S dollars in the expectation that they will depreciate against the Japanese yen.

In this example the GBP is the base currency and thus the “basis” for the buy/sell.

If you think the British economy will continue to do better than the United States in terms of economic growth, you would execute a BUY GBP/USD order. By doing so you have bought pounds in the expectation that they will rise versus the US dollar.

If you believe the British's economy is slowing while the United State's economy remains strong like bull, you would execute a SELL GBP/USD order. By doing so you have sold pounds in the expectation that they will depreciate against the US dollar.

In this example the USD is the base currency and thus the “basis” for the buy/sell.

If you think the Swiss franc is overvalued, you would execute a BUY USD/CHF order. By doing so you have bought US dollars in the expectation that they will appreciate versus the Swiss Franc.

If you believe that the US housing market bubble burst will hurt future economic growth, which will weaken the dollar, you would execute a SELL USD/CHF order. By doing so you have sold US dollars in the expectation that they will depreciate against the Swiss franc.

I don't have enough money to buy $10,000 euros. Can I still trade?

You can with margin trading! Margin trading is simply the term used for trading with borrowed capital. This is how you're able to open $10,000 or $100,000 positions with as little as $50 or $1,000. You can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital.

Margin trading in the foreign exchange market is quantified in “lots”. We will be discussing these in depth in our next lesson. For now, just think of the term "lot" as the minimum amount of currency you have to buy. When you go to the grocery store and want to buy an egg, you can't just buy a single egg; they come in dozens or "lots" of 12. In Forex, it would be just as foolish to buy or sell $1 EUR, so they usually come in "lots" of $10,000 or $100,000 depending on the type of account you have.

For Example:
  • You believe that signals in the market are indicating that the British Pound will go up against the US Dollar.
  • You open 1 lot ($100,000) for buying the Pound with a 1% margin at the price of 1.5000 and wait for the exchange rate to climb. This means you now control $100,000 worth of British Pound with $1,000. Your predictions come true and you decide to sell.
  • You close the position at 1.5050. You earn 50 pips or about $500. (A pip is the smallest price movement available in a currency). So for an initial capital investment of $1,000, you have made 50% return. Return equals your $500 profit divided by your $1,000 you risked to trade.
Your Actions GBP USD Your Money
You buy 100,000 pounds at the GBP/USD exchange rate of 1.5000 +100,000 -150,000 $1,000
You blink for two seconds and the GBP/USD exchange rate rises to 1.5050 and you sell. -100,000 +150,500** $1,500
You have earned a profit of $500. 0 +500

When you decide to close a position, the deposit that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.

We will also be discussing margin more in-depth in the next lesson, but hopefully you're able to get a basic idea of how margin works.


No, this is not the same as rollover minutes from your cell phone carrier! For positions open at your broker's "cut-off time" usually 5pm EST, there is a daily rollover interest rate that a trader either pays or earns, depending on your established margin and position in the market. If you do not want to earn or pay interest on your positions, simply make sure they are all closed before 5pm EST, the established end of the market day.

Since every currency trade involves borrowing one currency to buy another, interest rollover charges are part of forex trading. Interest is paid on the currency that is borrowed, and earned on the one that is bought. If a client is buying a currency with a higher interest rate than the one he/she is borrowing, the net differential will be positive (i.e. USD/JPY) – and the client will earn funds as a result. Ask your broker or dealer about specific details regarding rollover.

Don't know what the interest rates are for each currency? Here is a chart to help you out. Accurate as of 03/19/07.

central bank interest rates

Demo Trading

You can open a demo account for free with most Forex brokers. This account has the full capabilities of a "real" account. Why is it free? It’s because the broker wants you to learn the ins and outs of their trading platform, and have a good time trading without risk, so you’ll fall in love with them and deposit real money. The demo account allows you to learn about the Forex markets and test your trading skills with ZERO risk.



"Don't Lose Your Money" Declaration

Place your hand on your heart and say...

"I will demo trade for at least 2 months before I trade with real money."

Now touch your head with your index finger and say...

"I am a smart and patient Forex trader!"

The Skinny on Forex

What is FOREX?

The Foreign Exchange market, also referred to as the "FOREX" or "Forex" or "Retail forex" or “FX” or "Spot FX" or just "Spot" is the largest financial market in the world, with a volume of about $2 trillion a day. If you compare that to the $25 billion a day volume that the New York Stock Exchange trades, you can easily see how enormous the Foreign Exchange really is. It actually equates to more than three times the total amount of the stocks and futures markets combined! Forex rocks!

What is traded on the Foreign Exchange?

The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, and are traded in pairs; for example the Euro dollar and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY).

Because you're not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy.

In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country's economy, compared to the other countries' economies.

Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.

Until the late 1990’s, only the “big guys” could play this game. The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with! Forex was originally intended to be used by bankers and large institutions - and not by us “little guys”. However, because of the rise of the Internet, online Forex trading firms are now able to offer trading accounts to 'retail' traders like us.

All you need to get started is a computer, a high-speed Internet connection, and the information contained within this site. was created to introduce novice or beginner traders to all the essential aspects of foreign exchange, in a fun and easy-to-understand manner.

at is a Spot Market?

A spot market is any market that deals in the current price of a financial instrument.

Which Currencies Are Traded?

The most popular currencies along with their symbols are shown below:

Symbol Country Currency Nickname
USD United States Dollar Buck
EUR Euro members Euro Fiber
JPY Japan Yen Yen
GBP Great Britain Pound Cable
CHF Switzerland Franc Swissy
CAD Canada Dollar Loonie
AUD Australia Dollar Aussie
NZD New Zealand Dollar Kiwi

Forex currency symbols are always three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country’s currency.

When Can Currencies Be Traded?

The spot FX market is unique within the world markets. It’s like a Super Wal-Mart where the market is open 24-hours a day. At any time, somewhere around the world a financial center is open for business, and banks and other institutions exchange currencies every hour of the day and night with generally only minor gaps on the weekend.

The foreign exchange markets follow the sun around the world, so you can trade late at night (if you’re a vampire) or in the morning (if you’re an early bird). Keep in mind though, the early bird doesn’t necessarily get the worm in this market - you might get the worm but a bigger, nastier bird of prey can sneak up and eat you too…

Time Zone New York GMT
Tokyo Open 7:00 pm 0:00
Tokyo Close 4:00 am 9:00
London Open 3:00 am 8:00
London Close 12:00 pm 17:00
New York Open 8:00 am 13:00
New York Close 5:00 pm 22:00

The Forex market (OTC)

The Forex OTC market is by far the biggest and most popular financial market in the world, traded globally by a large number of individuals and organizations. In the OTC market, participants determine who they want to trade with depending on trading conditions, attractiveness of prices and reputation of the trading counterpart.

The chart below shows global foreign exchange activity. The dollar is the most traded currency, being on one side of 89% of all transactions. The Euro’s share is second at 37%, while that of the yen is at 20%.

Worldwide forex trading turover

Why Trade Foreign Currencies?

There are many benefits and advantages to trading Forex. Here are just a few reasons why so many people are choosing this market:

  • No commissions.
    No clearing fees, no exchange fees, no government fees, no brokerage fees. Brokers are compensated for their services through something called the bid-ask spread.
  • No middlemen. Spot currency trading eliminates the middlemen, and allows you to trade directly with the market responsible for the pricing on a particular currency pair.
  • No fixed lot size.
    In the futures markets, lot or contract sizes are determined by the exchanges. A standard-size contract for silver futures is 5000 ounces. In spot Forex, you determine your own lot size. This allows traders to participate with accounts as small as $250 (although we explain later why a $250 account is a bad idea).
  • Low transaction costs.
    The retail transaction cost (the bid/ask spread) is typically less than 0.1 percent under normal market conditions. At larger dealers, the spread could be as low as .07 percent. Of course this depends on your leverage and all will be explained later.
  • A 24-hour market.
    There is no waiting for the opening bell - from Sunday evening to Friday afternoon EST, the Forex market never sleeps. This is awesome for those who want to trade on a part-time basis, because you can choose when you want to trade--morning, noon or night.
  • No one can corner the market.
    The foreign exchange market is so huge and has so many participants that no single entity (not even a central bank) can control the market price for an extended period of time.
  • Leverage.
    In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make nice profits, and at the same time keep risk capital to a minimum. For example, Forex brokers offer 200 to 1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies. Similarly, with $500 dollars, one could trade with $100,000 dollars and so on. But leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains.
  • High Liquidity.
    Because the Forex Market is so enormous, it is also extremely liquid. This means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell at will. You are never "stuck" in a trade. You can even set your online trading platform to automatically close your position at your desired profit level (a limit order), and/or close a trade if a trade is going against you (a stop loss order).
  • Free “Demo” Accounts, News, Charts, and Analysis. Most online Forex brokers offer 'demo' accounts to practice trading, along with breaking Forex news and charting services. All free! These are very valuable resources for “poor” and SMART traders who would like to hone their trading skills with 'play' money before opening a live trading account and risking real money.
  • “Mini” and “Micro” Trading:
    You would think that getting started as a currency trader would cost a ton of money. The fact is, compared to trading stocks, options or futures, it doesn't. Online Forex brokers offer "mini" and “micro” trading accounts, some with a minimum account deposit of $300 or less. Now we're not saying you should open an account with the bare minimum but it does makes Forex much more accessible to the average (poorer) individual who doesn't have a lot of start-up trading capital.

What Tools Do I Need to Start Trading Forex?

A computer with a high-speed Internet connection and all the information on this site is all that is needed to begin trading currencies.

What Does It Cost to Trade Forex?

An online currency trading (a “micro account”) may be opened for with a couple hundred bucks. Do not laugh – micro accounts and its bigger cousin, the mini account, are both good ways to get your feet wet without drowning. For a micro account, we'd recommend at least $1,000 to start. For a mini account, we’d recommend at least $10,000 to start.

4 Reasons Why Traders Lose

Why do certain traders win consistently lose? Here are four reasons:

  1. Not having a proven trading methodology

    Those who consistently lose don’t know key numbers. They have no understanding of support and resistance. Chart patterns are foreign to them. Their definition of risk management is getting margin called. With no proven trading method or strategy, you are doomed to fail. You will end up quitting the game after a string of losses. But there is hope. With the right education, a workable method, psychological balance and persistence, it can be done.

  2. Not understanding how the market works, key indicators, key numbers, and ideal times to trade.

    When you place a trade, you literally go toe-to-toe against some of the biggest nerds in the world. Many professional traders are not only super smart and Ivy League educated, they’re also rich. That doesn’t mean that you, the small guy or gal, can’t win.

    It just means that you simply must educate yourself and be prepared to do battle. David can beat Goliath, but only if he’s prepared. Some people might think the cost of a trading education is too high. But the cost of ignorance is way more expensive.

  3. Risking too much per trade.

    The wannabe trader risks 10% or more of her trading account on a single trade. Real deal traders understand risk and manage it FIRST before thinking about profit. They don’t take trades if it forces them to risk too much. Pros keep their risk below 2% of their account balance. This gives them the staying power to survive multiple losing trades in a row without turning into a worry wart.

  4. Not being mentally prepared.

    Psychology is a huge part of trading and most people are not mentally prepared. When money is on the line, fear, greed, and other emotions make trading very hard. Make sure you understand the emotional aspects of trading and be prepared to deal with them before you put your money on the line.

Forex · News · Forex Forecasts

EURUSD. Decision of Bank of Canada about drop in rate by 0,25 % to 4,5 % supported dollar.

Today dollar rose at opening of the Asian markets and has continued growth at the European trading session. The decision of Bank of Canada to reduce the rate by 0,25 % to 4,5 % has supported the dollar greatly. This is the first decrease in the rate for last three years.

The decision of Bank of Canada was caused by attempt of protection of the manufacturers from the weakening dollar, as it is known the main commodity market for the Canadian manufacturers is the US market. Traders began to buy dollar actively after this news, as it can become a first sign in struggle against sharp dollar drop.

Canada - the first among G7 countries, which started to take measures to protect its own producers, Japan can follow its example. Every day Germany and France strengthen pressure upon the European central bank to make ECB heads to lower the basic interest rates, as the European manufacturers bear serious losses from hike of euro rate vs. dollar.

At the American session the dollar was supported after issue of data about production volume in the third quarter of this year. Labor productivity was up 6,3 %, that is 1,4 % above parameters of the second quarter and 0,5 % above expectations of the market.

Labor cost in the USA went down in the third quarter 2007 by 2,0% in annual calculation, against decrease by 0,2% according to preliminary data of the Labor Department.

Analysts forecast slide of labor cost by 1,0%.

The size of a hourly payment grew in the third quarter by 4,2% instead of 4,7% according to earlier published data.

Data about activity in crediting market became good news for dollar. According to Reuters agency: the index of mortgage applications in the USA grew last week, the Association of mortgage banks informed on Wednesday.

Seasonally adjusted Mortgage Bankers Association Index for a week which ended on November, 30th, increased by 22,5% up to 791,8 points.

Cost of 30-years mortgage credits with the fixed rate dipped by 27 basic points to 5,82%.

As a whole the dollar continues to hold its positions near a level 1,46. Large players do not hurry up to open long-term positions expecting key data this week - the US employment data, which are published on Friday. The market expects decrease in payrolls in November in comparison with October. In the given situation any parameters on a labor market above market expectations will support dollar.

While it is better to remain outside the market and to follow a current situation.

Safe Pips Indicator Daily & 4H

Here is the same indicator on Daily..I cant see how you can lose pips with this one:-) The thing is to have patience and wait till conditions are right... wait till all lines line up and then enter with confidence.
I welcome comments to make it even better. I played around overlaying a few different indicators. I am sure some of the guru's on here will be able to overlay even safer, quicker indicators.
Attached Images
Here is 4H GBP
I forgot to mention I use MA's :
WMA Linear weighted 3 Close SpringGreen
and WMA Linear weighted 4 Open MeduimOrchird
Attached Images

What really increases the probablility of your trade making pips is :

Look at the daily chart : Blue and Pink has crossed for a buy
Look at the 4h chart : Blue and Pink has crossed for a buy
Look at the 1h chart : Blue and Pink has crossed for a buy
Look at the 30 m Chart : Blue and Pink has crossed for a buy

This is true of all indic when the different TF's all say the same direction eg a buy ,and there are no major news coming up shortly plus its a busy time of day to trade I jump in with confidence when all indic lines up.
Luck Favours the prepared !

Safe Pips Indicator H1

Many thanks to everyone who has posted in the past and helped me along my way. In appreciation for all your efforts I will share an indic I made out of several indic and so far its been a safe making pips indicator for me. Please feel free to add comments how to improve it even more.

Use M4 charts with black background
Add the Abosolute Strength Indicator :
Make the colours (Inputs) as follows: Black, Black, Black, DeepPink
Overlay with RSI 2 (DeepSkyBlue) Apply to : Close
Levels : 10 and 90
Style: Silver ( dotted lines)
Overlay with Woodies CCISuper
Make the colours ( Inputs) as follows: Black, White, Black. Black, Black.
Levels 0
Style : Tan

Overlay with LSMA

Read the indic as follows:

On 30 min charts and higher TF's it works well for me. I do day trading I watch a position and close when a move is over, This indicator gives good signals several times a day on 30 mins and 1h TF's.

For a BUY :
When Blue and Pink line crosses and Blue is above Pink
Then wait till Lsma line( green, yellow, red line) goes in between Pink and blue line
Also wait till white line( cci6) goes in between Pink and blue
Its very safe to enter when LSMA is above 0
And when white line is above 0 as well
Its very safe when blue and white line trades almost on top of each other and going sharply in the same direction through 0

More aggresive traders can just use the white line as a guide when it goes through 0 up its a buy

When blue and Pink crosses for a buy, make sure white line is above 0..if it is under 0 the move might be very small dont be greedy here just take a few pips or stay out and wait for white to go above 0
Exit: On a Buy
- When the Blue line goes above the 90 dotted line .. keep a close look as it shows now over bought. Also look at the Pink line when its near 10 or under, its also shows its time to close for profit.
- When LSMA line goes out between Pink and blue
Attached Images
Attached Files
File Type: mq4 AbsoluteStrenghtHisto_v1.mq4 (7.5 KB, 2116 views)
File Type: mq4 lsma 3.mq4 (3.4 KB, 2039 views)
File Type: mq4 WoodieCCISuper.mq4 (3.9 KB, 1837 views)

Supernova GBP/JPY Mini Trend Catcher

I have been a bit of a big mouth of forex factory so have received a few pm’s about my new system.

Ok so I look at the chart for setups, for a short setup I am looking for price to be cleanly below the green ma (t3 standard settings) So if going short you want red candles with no or few upper shadows and if going long blue candles with no or few lower shadows.

The qqe alert is the crossing of the qqe indicator shown by blue/pink dots. Buy blue and pink sell, this is really just an alert and helps me pull the trigger, I do not blindly jump into a trade when a new dot forms. All indicators need to agree.

Right you’re checking out the potential setup with regards to the above, now look at the momentum indicator, I only go short when it has crossed below the grey dotted line and directional movement index indicator has crossed so that the purple line is above blue vice versa for long.

I look for setups from 2 am EST till 6 am EST, if you are late and missed any 100+ movements during this time be wary of trading as it will probably range until the US open. If there has been no big breakout it is safer to look for a setup after this time. Next best time to trade is us open. I have also noticed some good trades around 15:00 EST and 00:00 EST.

It's up to you as long as hekein ashi is cleanly above or below the t3, momentum has cross the grey dotted line and directional movement index agrees it is a high probability trade to go with the qqe alert.

Sometimes the qqe alert comes a bit early, wait for the other indicators to agree and you have less chance of the trade going against you right away to realise profit.

As for profit taking I just trail price as I go. I am looking into Spudfyre's way, once up 20 pips lock in 7, once up 30 pips lock in 14 and once up 35 pips lock in 20. I think from there leave 20 pips locked and let it go, you can easily catch 100+ movements with GBP/JPY in 5min.

ps - The trade pics appear like little 5 pips scalps but if you load the chart and check most of the trades are 100+ pips!


I use all timeframe charts - GBP/JPY, EUR/JPY, CAD/JPY, NZD/JPY, GBP/USD
(Trading off the 5min is riskier in choppy or ranging markets, If you choose to do so please use the 15min at least for reference)

QQE Alert set to period 1

Directional Movement Index 14

Momentum 10

T3 - period 8 exponential volume 0.7

Kudos to Skyline for his hard work on migrating the system to Metatrader! Excellent work as I was not confident in what we had for MT4 before.
Attached Thumbnails
Click image for larger version  Name:trade1.jpg Views:4201 Size:55.5 KB ID:45517 Click image for larger version  Name:comments.jpg Views:3156 Size:150.5 KB ID:46031
Attached Images
File Type: vttrs QQE_alert.vttrs (1.8 KB, 2224 views)
File Type: zip SuperNova EA v1[1] (212.6 KB, 2218 views)
Here's qqe for MT4.
File Type: ex4 ###QQE_Alert_MTF_v2###.ex4 (9.2 KB, 2337 views)

Below is T3 for MT4.
DMI (Average Directional Movement)
and Momentum are standard indicators in MT4.
T3.ex4 (4.5 KB, 917 views)

Simple Method of Scalping any pair on 5 min chart , specially GBP/JPY

Attached Files
File Type: mq4 ###Auto Pivot.mq4 (15.2 KB, 5329 views)
File Type: mq4 StochHistogram.mq4 (2.6 KB, 4435 views)
File Type: ex4 MACDTraditional.ex4 (3.2 KB, 1752 views)
File Type: tpl imran_setup.tpl (8.5 KB, 1860 views)
File Type: ex4 Laguerre-ACS1.ex4 (3.7 KB, 1829 views)
File Type: pdf 5min_trade_strategi.2.pdf (308.4 KB, 3096 views)

Simple Method of Scalping any pair on 5 min chart , specially GBP/JPY

4 Hour Strategy (MACD)

I am using this 4 Hour strategy only for the last month as I have paper traded for 2 years trying everything and or system I could find. (I am trading equities for almost 10 years)I have decided that I will only go live(after some losses-not to serious) after I have studied the field of forex and are satisfied that I have a system that works. I do believe that we are trying to make it to impressive and difficult. This system is simple and easy to understand. I have back tested and forward tested it over more than 200 trades and it gives 300+ pips per month. I never had more than two consecutive losses. I never use a stop loss bigger than 50. There are enough chances to ignore the ones bigger than 50.

I am using this strategy only on the EurUsd and the GbpUsd. Have not tested it on other.
I hope that you will find some use for it and that it put you on the road to financial independence.

File Type: pdf 4 Hour MACD Forex Strategy.pdf (635.2 KB, 17481 views)
File Type: pdf Planning your Trade.pdf (92.9 KB, 37406 views)


Strongest Weakest


Watching which economies are offering higher interest rates can help you project where global investors are going to be moving their money and which currencies will be increasing in value.

Global investors are always looking for the best return on their money. If an investor can earn 5 percent holding his money in Economy A, and he can earn 2 percent holding his money in Economy B, he is naturally going to choose Economy A.

As investors begin moving their money into Economy A to take advantage of the higher interest rate, demand for the currency of Economy A goes up. As demand goes up, the value of the currency also goes up. If you can identify which currencies will be increasing in value, you can buy those currencies and increase your profits.


Strongest Weakest


The Interest Rate Seesaw of Supply and Demand measures the strength and weakness of each economy's prevailing short-term interest rate. These rates are controlled by the following central banks:

  • United States---U.S. Federal Reserve (Fed)
  • United Kingdom---Bank of England (BOE)
  • Eurozone---European Central Bank (ECB)
  • Switzerland---Swiss National Bank (SNB)
  • Japan---Bank of Japan (BOJ)
  • Canada---Bank of Canada (BOC)
  • Australia---Reserve Bank of Australia (RBA)
  • New Zealand---Reserve Bank of New Zealand (RBNZ)


Strongest Weakest


Total fundamental strength measures the cumulative strength of each currency based on each of the following fundamental factors, or seesaws:

Interest Rates Seesaw

View Today's Seesaw

What Does it Measure?
Why is it Important?
How to Use It?

Yield Curve Seesaw

View Today's Seesaw

What Does it Measure?
Why is it Important?
How to Use It?

Ten-Year Government
Bond Yield Seesaw

View Today's Seesaw

What Does it Measure?
Why is it Important?
How to Use It?

Equity Market Yield Seesaw

View Today's Seesaw

What Does it Measure?
Why is it Important?
How to Use It?

Daily Seesaw of
Relative Strength

View Today's Seesaw

What Does it Measure?
Why is it Important?
How to Use It?

Weekly Seesaw of
Relative Strength

View Today's Seesaw

What Does it Measure?
Why is it Important?
How to Use It?

Monthly Seesaw of
Relative Strength

View Today's Seesaw

What Does it Measure?
Why is it Important?
How to Use It?

Quarterly Seesaw of
Relative Strength

View Today's Seesaw

What Does it Measure?
Why is it Important?
How to Use It?

GBP/JPY: On Its Way Down Below 215.00?

Carry traders have been wincing as the GBP/JPY has been declining during the past few months. Elevated risk levels have been sending the value of the Japanese yen (JPY) through the roof, and we're all wondering when/if the pain is going to stop.

The GBP/JPY has been steadily climbing since late 2000---making many carry traders too complacent. If they don't wake up soon, they're going to lose a lot more money.

Preview - Fresh Multi-Year Lows Expected for Permits, Housing Starts

Tuesday marks the busiest economic calendar day for this traditionally less volatile pre-Thanksgiving US holiday week. In addition to detailed minutes of the last FOMC decision, where a less dovish than previously expected statement has likely signalled the Fed on hold for the rest of 2007, a fresh set of numbers assessing housing activity in the month of October will be released. Markets are anticipating 1.17 million in housing starts and 1.20 million building permits, both below September's 1.19 million and 1.26 million figures respectively.

The forward looking nature of these numbers make them particularly crucial with investors looking for a bottom in the housing downturn. Housing starts measure the number of residential units on which construction has commenced, while building permits are required in some parts of the country to break ground, thereby generally leading the starts as the two measures trend together (attached chart).

At this juncture, there is little doubt left that the overall economy in 2007 has been marred by a severe housing recession. However, there are some encouraging signs suggesting that the pace of deterioration in housing activity may be slowing. Housing Market Index released today suggested a pause to a freefall, with this month's figure on par with that of last month. Additionally, pending home sales data for September released just last week unexpectedly ticked higher. Moreover, in spite of a drop in existing home sales for that month, new home sales saw an improvement from August. And whereas any rise in this traditionally volatile figure has recently been accompanied by an average price decrease, September's rebound was also accompanied by a jump in selling price.

Taking these factors into consideration, a rebound in both permits and starts would not be entirely surprising. In turn, this could diminish the likelihood of a December 11th Fed rate cut that has by now been fully priced in by Fed funds futures in spite of last week's hawkish Fed speak, taking the dollar higher.

Attached Images

Preview – Canadian CPI Critical For CAD

Over the last 10 days, the Canadian Dollar (CAD) has dropped a whopping 8.5% against is US namesake and importantly, the CAD dropped against all the major currencies by varying %age in the same period. This is in sharp contrast to the trend, which was seen in the first 10 months in 2007, where the CAD had an unprecedented 24% against the USD.

That sharp appreciation in the CAD now seems to be starting to show up in fundamentals for the CAD, which may result in some of those gains taken away. The CPI today and Retail Sales numbers tomorrow may result in a swing in markets expectations of an interest rate change from the BOC at its next meet on 04-Dec. Sharply negative numbers for both are likely to result in an ultra-dovish statement, if not an interest rate cut itself.

Currently, the CPI m/m for October is expected at 0.1%, down from 0.2% seen last month. The Core CPI m/m is expected at 0.1%, down from 0.4% last month. The most important number however, the BOC Core Inflation Index Y/Y is expected at 2.0%, unchanged from 2.0% last month, at its lowest since Aug-06. See the chart below with the expected number in Red.

Any number above 2.0% for the BOC Core Inflation Index would be an upward surprise and is likely to be greeted with immediate selling on USD-CAD. On the other hand, a number below 1.9% would see USD-CAD rally, as the speculation of a rate cut from the BOC would increase. An immediate sharp move expected from the release of the data, would make short term trading extremely tricky. Hence, short term trades should be done after looking at the numbers.

Technically USD-CAD seems to have bottomed out at 0.9068, which is likely to hold for atleast 2-3 months, if not more. As such, the short term trend for the pair is bullish, and dips are likely to find buying while it trades above 0.9400. The immediate Resistance is at 1.0000. A rally above that could lead to further year end short covering - profit taking from longer term players, which could result in a rally towards 1.0200. However, the latter would require fundamental backing as well to sustain. Nevertheless, the near term bias for the pair is bullish, and buying dips should be considered while above 0.9400.


1.system Brain Trading
1000 [1.4 MB]
Downloaded 198 times

Cara-cara nak guna System Brain Trading ni..

1 ) Copy dan Paste 13 files "exe" tu dalam folder indicator.
cth: c: program file/Straighthold Trader/expert/indicator. paste dalam folder ni.

2 ) Copy dan paste 1 file "TPL" dalam folder templates.
cth: c: program file/Meta Trader/templates. Paste dalma folder ni

3 ) Restart Platform Meta Trader.

4 ) Kat Platform Meta Trader tu, cari templates, pastu cari "winning_signal_v.91 pastu klik. Templates dalam Platform Metra Trader tu kat atas sebelah kanan,sebelah jam kecik warna biru.

Dolly system.

Dolly_Graphics_v10_BT2.rar [9.35 KB]
Downloaded 83 times
- Guna TF 30

Stoch, Pivot & trendline
ile comment: pivot indicator [1.36 KB]
Downloaded 48 times


system Brain Trading
1000 [1.4 MB]
Downloaded 198 times

Forex Market In General

Forex trading is conducted in the foreign exchange market, otherwise referred to as the forex or FX market. This is the largest financial market in the world, with an estimated daily average turnover well in excess of US$1 trillion. A foreign exchange rate is the relationship between two currencies, which means the amount of one currency that would be required to buy (or sell) one unit of another currency. Currencies are quoted in pairs, e.g. Euro/US$ = EUR/USD, US$/Japanese Yen = USD/JPY, etc. Forex trading involves a foreign exchange transaction, defined as the simultaneous buying of one currency and selling of another currency.
The foreign exchange market entered a new phase in 1971 when the Bretton Woods accord, which was characterized by fixed forex trading rates, was abandoned. This led to a new forex trading system of floating rates and opened a new world in foreign exchange.
Forex trading is said to be a 24-hour, 5 day a week market, starting each day in Wellington, NZ and then moving around the globe as the business day commences in the next financial center. This rotation includes Tokyo , London , and New York . This allows foreign exchange market participants to react to news, whether it be economic political or social, 24 hours per day. Unlike other markets, such as stocks or futures, forex trading does not involve a central exchange and is considered to be an over the counter market known as the interbank market. Most forex transactions are conducted between two counterparties via the telephone or over an electronic network, such as the internet.

How to spot a trade opportunity:

Buy/Sell signals:
After you get the two signals (Arrow & QQE 60 cross signal) you enter after the QQE5 or QQE1 cross the 50 line.

  • Only take the short trade if the signal generates below the Daily Pivot level.
  • Only take the Long trade if the signal generates above the daily pivot level.

If QQE5 cross to the opposite direction you must exit the trade.

You can re-enter a trade when QQE1 touch the 50 line and cross back towards the QQE60. When you get the proper entry set up, check for the 1hr momentum. If the 1hr momentum and 15 min Momentum on the new confirmation bar shows a very promising trend continuation (45 Degrees plus bent) you don’t have to wait until the 5 SMA touches to enter.

Stop Loss:
60 pips SL is closest support or resistance around 60pips

Take profit:
100 pips


a). Simple Moving Average
Values: 5 close 100 close
b). Gann Hi Low Activator
c). Level stop Reverse
Values:Use ATR mode True Non-ATR stop pips 40 ATR Periods 28ATR Multiplier 2.0 ATR Smoothing 0
D).QQE on 1min and 15 min time frames (3 indicators)
Values:Smoothing Factor 60 (QQE 60) Smoothing Factor 5 (QQE 5) Smoothing Factor 1 (QQE 1) CLICK HERE FOR INDIVIDUAL QQE SETTINGS
E) MOM – Momentum
Value: 10 Close
F) Daily Pivot points at start times
Values: Pivot set 1 = Daily (1=daily, 2=weekly, 3=monthly) only applies to MT4. For VT you would use the "Pivot Point (Daily)" indicator Asian 1900EST 2400GMTLondon & US 0300EST 0800GMTUS (after London close 1100est) 0800EST 1300GMT
Change your Daily setting for the start of every session.
G) Trading Hours
Values: 4am GMT to 1500 GMT only

Auslanco 15min GBP/JPY startegy
Developed by Spanishfly based on my original 4hr/1hr MTF strategy.15 min (Intra-day) GBP/JPY for VT charts . Charts can be downloaded free via Moving Average 5 closeb).Gann Hi Low Activator 10c).Level stop Reverse version 2 Values : ATR Periods 9 ATR Multiplier 3d).QQE alert Values: Smoothing Factor 60Buy : Wait for the two buy alerts.(Green arrow and Blue dot). Buy when the price hits 5 SMA after the two signals.Stop Loss: Right below the confirmation bar on the Gann Hi low Activator line.Take profit: Calculate the distance between OPEN price of the confirmation bar and the price of the Gann Hi low Activator(TFT line) at that point and multiply it by 2. (twice as your stoploss )My TP targets are as follows and an example of lot allocation(total lots 5): 1st TP: 2 X Stoploss (4-Lots)2nd TP: Reverse signal confirmation(1-Lot) Total profits for 5 days live forward testing (since 26/August) : 923 pips on TP1 (7 trades) 6 wins 1lossThis strategy is currently on Forward testing stage. Please demo trade this at least for 2 months