Hi Traders
Today's I wish to explain to beginers some terms related to forex traidng...
Spread and liquidity...
Forex brokers don’t charge you a commission for every trade you make (at least most forex brokers). Instead, they make their profit on the bid/ask spread which is measured in pips.
As a forex day trader you are aiming at capturing small price swings sometimes several time per day. Also, your profit objectives are obviously much smaller than the swing trader’s profit objectives. All this means one thing: every pip counts. You cannot afford to trade currency pairs with large spreads, if you do your profit will get eaten up to a point where you will not be trading with an adequate risk/reward ratio.
Forex day trading must be done with liquid pairs. Most forex brokers will provide you with a very narrow spread for the most liquid currency pairs. As an example, many brokers are now offering a 2 pip spread for EUR/USD and USD/JPY and a 3 pip spread for USD/CHF and GBP/USD. These are the most liquid pairs and the ones a day trader should focus on....
NEWS:The two daytrading strategies, "Forex Runner" and "Forex Flip & Go", aim to capture an average of 40 pips per trade and are also 100% mechanical (totally rule based: no interpretation, judgment or discretion)...make your fatal step Today...
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