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What is a Take Profit Order

on . Posted in Weekly Forex Articles - General Forex Knowledge

A take profit order is an order that is used by forex traders to specify the actual rate or number of pips from the point of the current price to the point where the current position could be closed at a profit. It is the level where a forex trader chooses to take a profit. 
 
A pip is the smallest variation which can take place in a given trade. It s usually 0.0001 for EUR/USD and for most other pairs of currencies that can be traded. The value of 1 pip can be calculated for a given trade simply by multiplying $100,000 by 0.0001 and seeing that the smallest variation gives a profit or loss of $10.
 
In the forex trading business, ‘take profit’, ‘stop loss’ and ‘trailing stop’ are three terms that are commonly used. These terms are the most preferred type among limit orders used to exit transactions under specific circumstances. They allow the trader to reduce exposure to risk to the barest minimum as well as have more composure while trading.
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What is a Moving average?

on . Posted in Weekly Forex Articles - General Forex Knowledge

A moving average is a very common technical indicator of type reversal trends that commonly occur with respect to Forex trading. There are various things a moving average does, but its primary function is to track a specific trend. Moving averages are lines that are programmed to follow the direction of price divided by the number that is set.
 
For an hourly chart, to see the average price for a period of over a hundred hours, a moving average of 100 lines is set in motion. As the hour progresses, the moving average would show the average price for the past hour till it gets to the hundred hour mark.
 
It is one of the popular trend indicators, because it is highly efficient in gauging a current trend. A moving average is a mathematical result that is gotten by getting an average of past data points. Once this figure has been determined, the trader can look at the key averages without having to sift through the price fluctuations of the trading day.