Day by Day, hourly analysis of EUR/JPY currency cross on the foreign currency market (FOREX). Sell and Buy signals on a technical basis Use signals at your own discretion.

Sunday, October 3, 2010

FX Trading Class 101 Part 1

*This is to be the first installment following the post where I promised to flesh out the material this blog focuses on, currency trading*

The first, and most important aspect of currency trading is understanding the "currency cross." Which currency pair are we looking at or trading? When identifying a cross, it is displayed as the following:

"currency A" / "Currency B"

So if I were to see

"EUR/JPY"

and then the price quote: "115.236" next to it, what I am reading is that 1 Euro buys 115.236 Yen. Another way to conceptualize a cross is backwards, or, to buy 1 Euro requires 115.236 Yen.

After grasping what a pair and its price quote represents, we can move onto our options when trading, and there are only two.

Buying (other terms: "going long," "covering," etc.)

and

Selling (other term: "shorting")

For the purposes of this blog, I will refer to buying as "buying" and selling as "shorting."

I'm really beat, and I'll be completing this series tomorrow morning along with my market sentiments.

Thanks for reading!

20 comments:

  1. china keeps devaluing their currency, we need stronger tarrifs

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  2. I wish i took an economics class in high school

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  3. I actually used the technique of short selling in the World of Warcraft auction house to make about 100k gold. If only I did it in real life...

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  4. Woah,that sounds like important stuff man. Keep up the posts!

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  5. How fortuitous that I came upon this blog considering the subject matter of my own. I'm sure the information here will be useful!

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  6. Does anyone remember when people were saying China was trying to crash America's market by buying a lot of dollars to artificially inflate them? What happened with that?

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  7. i heard greatdepression was over. CAN U EXPLAIN

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  8. Great post!

    looking forward to reading the next one

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  9. can't deal with different currencies myself.

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  10. Ahh so thats what you meant by shorting!

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  11. I think I get it? I feel like I'm in school.

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  12. When do we get to Hurst coefficients?

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  13. Woah,that sounds like important stuff man. Keep up the posts!

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  14. Very helpful, will be checking out your next post!

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  15. I love all the advice you give here.. Really helpful

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  16. very informative....looking foward to future posts on this

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  17. i saw today that the euro was down, weird week for currency in general

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