Starting from the bare basics...

thread: Starting from the bare basics...

  1. #1

    Starting from the bare basics...

    Hello Men,

    Wonderful website. A lot of useful information regarding forex.

    I am new to the entire forex item, and have only signed a demo account. Most of the newcomer information I have found requires a little understanding of trading. I myself do not like to learn something unless I know the in's out's behind how it works. I guess what I am trying to find out is the entire concept behind trading currency.

    This is my perception;
    You begin with an investment, state $xx,xxxUSD.

    In the event you wished to exchange USD/YEN, you'd buy some YEN if the USD is powerful. Lets state, USD/YEN 118.10

    The idea is to exchange the YEN back for USD, if the YEN is stronger then the first trade (USD has got weaker). Say, USD/YEN 117.50. This outcome would make you a profit.

    I need to get a handle on the notion, before I learn all the technical terms calculations. Any help would be appreciated.

  2. #2
    Hi eastmaels,

    that I sincerly appreciate the time you've chosen to explain the concept for me advice. Thank you!

    If you buy the pair to, let's say 117.00. . You are buying USD dollars with that exchange rate (117 yen to a dollar) or the price displayed in the chart.
    Basically it just means you bought $1 with 117 yen.

    For you to earn a profit, that price has to finally go up to let's say 118.00. Remember, you're holding $1 right? So as soon as the price goes to 118, then you will then market the dollar to reach a 1 yen profit.
    Ahh, fine... I believe my concept was backwards.

    Therefore the base currency is the currency you are buying (and also on the remaining ). Lets take AUD/USD for example then, at say AUD/USD 0.7555. In this instance you'd be buying AUD$1 for USD$0.7555 -- Now I have A$1. When USD goes above my first investment (of 0.7555), that's when my profit begins, because I am buying back more $USD then I began with.

    So together with your USD/JPY instance, where you are buying USD with YEN... how can you start with YEN as soon as your true cash is $USD?

    Thanks again, cheers.

  3. #3
    Hi,

    I sincerly appreciate the time you've chosen to explain this concept to me advice. Thank you!
    No difficulty. . I'm happy I didn't confuse you. .
    So the base currency is the currency you are buying (and on the remaining ). Lets take AUD/USD for example afterward, at say AUD/USD 0.7555. In this example you would be buying AUD$1 for USD$0.7555 -- Now I have A$1. When USD goes over my first investment (of 0.7555), that is when my profit begins, since I'm buying back more $USD afterward I started with.
    Basically, that is the concept behind foreign exchange. .
    So with your USD/JPY example, where you are buying USD with YEN... how can you start with YEN when your true money is $USD?
    Well, as much as I know, the currency of your true account does not have any bearing on it. . You are not really buying the USD with the true money on your account. .

    I might be incorrect here. . So I'm afraid this is where my knowledge ends. .
    Sorry. .

    I hope others could help. .

    Regards,
    East

  4. #4
    Hi Johnny,

    Welcome to cliqforex.

    It is a very good move, in my view, you started demo trading first.
    If I might suggest, you maintain demonion trading until you are profitable with demonion consistently for at least, let's say 3 months. . Since that's the number used.

    Anyhow, enough of that blabber... And as you're only asking for the basics, and I believe that's up to where I am capable of committing. . That is what I will try to give. I hope this response helps:

    If you say you are buying the USD/JPY pair, it implies you feel the USD will strengthen against the yen (or the yen will weaken against the dollar).

    Once the base currency (the currency on the remaining / character) strengthens (value in value), the price that you see from the charts will go up. Along with the price will go down when the base currency weakens (depreciates in value).

    (Alright, this feels like I'm having an exam or something. . )
    Should you buy the pair to, then let's say 117.00. . You're buying USD dollars with this particular exchange rate (117 yen to a dollar) or the price displayed in the chart.
    Basically it just means you purchased $1 with 117 yen.

    Incidentally, no actual exchange really happens. I'm really not familiar with what really happens, but it is in my own studies. .

    For one to make a profit, that price has to eventually go up to let's say 118.00. Bear in mind, you're holding $1 straight? So as soon as the price goes to 118, then you will then market the dollar to reach that a 1 yen profit.

    Incidentally, don't let it confuse you... If they state YEN in forex, they're speaking to the USD/JPY pair. .

    Whew.... Should I confused you more, then please disregard this post. .

    Regards,
    East

    P.S.
    Incidentally again, I have been in your shoes and this is the place where I mainly got my schooling. I believe that this very first thread I started will benefit:
    https://www.cliqforex.com/general-fo...-yr-notes.html

    Best of wishes for your studies. .

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