The world of investments, trading and stock market is extremely exciting, nail biting, and tests your wits and analytical ability to understanding the trends in the market. Forex trading or commonly called as foreign exchange is a market where global currencies are traded by exchanging all the currencies of the world with one another. A foreign exchange works on the concept of converting one currency to another, which means that a lower valued currency is traded for a higher valued currency. The rates of exchange do not always remain the same and fluctuate regularly. The trend of change in currency rates depends upon a lot of factors, one of them being the supply and demand relation of currencies. For example, a dollar having a higher rate will be more in demand, compared to the currency of an economically backward country in the market. To help you understand the market trends Strategii Forex carries out a simple explanation for each and every foreign exchange concept.
What are the opportunities that foreign exchange provides you with?
The foreign exchange market works on the same concept of a stock market, wherein you invest in a particular stock based on its value in the market and your expectations about its future performances. But, the biggest advantage here is that you can trade in foreign exchange market in a very easy way. All you have to do is just buy and sell like you do in a normal market. If you think the currency rates will decrease in the near future then you can sell it and get a profit while the conditions are still favorable. In case the currency is being rated as cheap in the present scenario, and the value can go up in coming times, then it is advisable to buy it at a lower rate. The currency bought can be sold when it gains a higher rate and profits can be earned. People earn lots of money just by trading in foreign exchange markets via platforms such as Strategii Forex who is a market leader in foreign exchange brokerage.
How to buy and sell currencies in a foreign exchange market?
The most important thing that makes foreign exchange trading very simple and intriguing is that it consists of only two currencies at a single point of time for trading. The two currencies are the one sold and the one being bought. The most traded currency pair in the world is European dollar against the US dollar. The currencies being traded in are called the base and counter currencies. There are always tow prices that are displayed, one being the selling price and the other being the price at which it is to be bought. The currency being displayed first in the pair listing is the one that you will buy or sell for the latter one. The difference between the two currencies due to the buy and sell prices is known as spread. This can be understood in the following manner: if you think the base currency will fall in value then you sell it and if you presume the value will go up then you can buy it for future gains. The past trends of currency fluctuation can also be viewed on brokerage websites like Strategii Forex.
How to Earn by Trading On Margins?
When people trade in foreign exchange market they earn by the difference that is there between the buying and selling of the two currencies. The phenomenon when the price of a currency is cited at hundredths of the schilling or cents then, the liquidity in the market goes up, resulting in small margins and more exposure. But, if you are a new comer then you should always keep your investments low. Strategii Forex guides you about making smart and less risky investments.
How to predict the future performances of currencies that you might be interested in?
The trend indicators are the best way to understand the market ups and downs and invest wisely in the foreign exchange market. The trend indicators help you analyze the trends from the point of time when they begin to form. There are software’s which serve this purpose but, Strategii Forex has special software that has been really effective in predicting trends and evaluating the performance of currencies. One such software is the Alligator Indicator. The Alligator Indicator informs you about trends as and when they begin to form and also when a trend has vanished. The alligator methodology focuses on elucidating the way a currency behaves in the market, and how it moves from a trend following phase to a situation when there is no trend in the fluctuations of the currency. If there is no trend the Strategii Forex calls it a sleeping alligator condition. When the trend forms and the longer it takes to be formed show its maturity. These trends can be trusted in the long run for investment decisions.
Understanding the Alligator Indicator
The alligator indicator software works on a complex trend analysis mechanism and thus it becomes imperative to understand what the graphs mean. The graphs are mainly comprehended at three points. These are:
- The Pine: this is the slowest moving average line and is blue in color. The line depicts thirteen mobbing lines at a shifted gap of 8 candles
- The Teeth: these lines are red in color and represent the center of three moving averages which are leveled over eight periods of cycle and moved ahead by five candles
- The Lips: these lines are shown in green color on the chart, and represent the fastest fluctuation among the three moving averages. The trend is referred to five periods and three candles which are moved forward
These colors are meant for representation and help in understanding the behavior of the currency in the market. Software such as Meta Trader versions derive information from alligator indicator and help you in making low risk investment decisions by doing the calculations for you. So, always invest wisely after making calculative decisions.
