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» What is Forex and what is traded in forex?
Trading FOREX (Foreign Exchange) or better known as the Forex (Foreign Exchange) is a type of trade transaction currency (currency) of a country's currency (the currency) other states. With an average daily volume of U.S. $ 2 trillion, the Forex Market 46 times greater than all the combined market shares and therefore called the most liquid market in the world. Forex Market is a market that is open for 24 hours continuously

» How a Forex?
Trading Forex (FX) is an exchange of one currency against other currencies in order to gain profit (gain) of the difference in currency values. For example:

A trader benefit from the transaction BUY Pounds (Great Britain Pounds / GBP)

* $ 10,000 x 1.9800 = U.S. $ 19.800
(Trader bought GBP 10000 by selling U.S. $ 19,800)
** $ 10,000 x 2.0000 = U.S. $ 20,000
(The trader sells GBP 10,000 by way of purchase of U.S. $ 20,000)

» Currency Pair (Currency Pair)
Currency (Currency) is always a pair or pairs for each forex transaction means you are buying one currency and simultaneously selling another currency. For example rate / exchange rate for the pair GPB / USD is the GPB / USD = 1.8500, meaning that 1 pound is $ 1.85 USD.

Cross Rate is a currency pair (pair) that do not contain the official currency of a country where the currency is traded, such as forex transactions conducted in the U.S. (its official currency is USD). This means that the currency pair that does not contain the USD is the cross rate of the USD. An example is the GBP / JPY, EUR / GBP, etc.. Pair that do not involve USD and EUR are called euro involves cross like EUR / GBP.

Currency Pair (Pair) consists of two different currencies quote. Currencies are located on the left is the base currency. for example on GBP / USD then AUD called base currecy. While the USD is the quote currency or counter currency.

An example is the quote EUR / USD 1.2500, where as a base currecy EUR and USD as the quote currency. This means that EUR 1 worth of U.S. $ 1.25.

If the quote moves from EUR / USD 1.2500 to EUR / USD 1.2510, the euro gained and the U.S. dollar weakened. Vice versa if the quote moves from EUR / USD 1.2500 to EUR / USD 1.2490, the euro weakened and the U.S. dollar higher

When you BUY EUR / USD will mean you buy the base currency (EUR) and at the same time selling the quote currency (USD). If you SELL EUR / USD will mean you sell the base currency (EUR) and at the same time buy the quote currency (USD).
Buy EUR / USD -> Buy EUR / Sell USD
Sell ​​EUR / USD -> Sell EUR / Buy USD
Another example:

Pair EUR / USD:
For the prediction USD strengthened against the USD, you can do a BUY EUR / USD
For the prediction USD strengthened against the EUR, you can do a SELL EUR / USD

Pair USD / JPY:
For the prediction USD strengthened against the USD, you can do a BUY USD / JPY
For the prediction JPY strengthened against the USD, you can do a SELL USD / JPY

» Major Currencies
Major currencies that are common and are often traded in the world are:

» Forex Market World
Forex market is a market that is open 24 hours continuous 5 days per week. The table below us for a second that is based on the New York Times when Day Light Saving Time (DST) and Eastern Standard Time (EST or ET). Starting on March 9, 2008 - 2 November 2008 using the DST (GMT 11 hours faster than the NY Times DST), whereas on 2 November 2008 - March 8, 2009 using the EST (GMT 12 hours faster than the NY Times EST), and so on. For the full list you can check in http://timeanddate.com/worldclock/timezone.html?n=179

» Smallest Currency Unit (point / pip) and Contract Size
Point (pip) is the smallest unit of price movement in forex. One point (pip) for the pair GBP / USD is 0.0001 while the single point for the pair USD / JPY is 0.01. Example: Pair GBP / USD, the movement of 1.8500 to 1.8550 is 50 points.
The value per point (pip) depend on the number of contract size (lot) and the currency used.

Contract Size (Lot) is the smallest amount in forex trading. In general, the contract size (lot) that is often used is the Standard Lot, Mini and Micro Lot Lot Standard Lot equal to $ 100,000, Lot is $ 10,000 Mini and Micro Lot is $ 1000.
If your forex broker supports Standard and Mini Lot, then that means you can trade with a number of multiples of 100,000 and 10,000. For example: $ 30,000, $ 120,000, and others.

» Quote / currency rates
Forex price quote consists of two prices, ie a lower price (Bid) and a higher price (Ask / Offer).
Bid is the price you sell to forex broker (dealer) or the price at which forex broker (dealer) to buy from you. While Ask / Offer is the price you bought from forex broker (dealer) or the price at which forex broker (dealer) would sell to you. Bid is generally lower than Ask.

Bid and Ask price difference is Spread. The smaller the spread dealers more profitable forex trader.

Quote from forex looks like this:

Quote of the EUR / USD Bid / Ask: 1.2293/96. Means the sale price to your broker and purchase price of 1.2293 is 1.2296 brokers. 1.2296-1.2293 is a 3-point spreads.

Example:
You open BUY (Long) EUR / USD at price 1.2296 (Ask), then if the current Bid price of 1.2293 suggests, means you are still a loss of 3 pips. Therefore, every time you open positions will certainly take place minus the spread (ie eg 3 for EUR / USD). To get the profit you have to wait until the price bid on price tables UP more than 1.2296

Please note:
When you open a Buy (Long), means you can open a position with the ask price, and then will be closed (close / liquid and including stop loss and profit target) using the bid price.

When you open position Sell (Short), meaning that you open a position with the bid, and then will be closed (close / liquid and including stop loss and profit target) using the ask price.

* TP = Take Profit
** SL = Stop Loss

» What is the meaning of LONG and SHORT positions?
BUY LONG or open position is the position in which a trader buys a currency at a certain price and aims to sell it later at a lower tinggi.Jadi investors benefit from a rising market (graph pair up). Suppose you buy in a position to sell at 1.1525 then 1.1500 then you'll benefit as much as 25 points / pips.

BUY LONG or open is expecting the price of currency pair (pair) UP to profit. (Graph pair up) Example: Long (BUY) eur / usd then you expect the graph eur / usd is UP or the euro strengthened against the usd.

The rise in the price of a pair you can also interpret the currency in the pair FRONT currencies strengthened against the pair behind. Example: Graph Pair price eur / usd UP it means that the euro strengthened against the usd.

Price that was used during OPEN BUY / LONG is the purchase price (ASK) and the prices used when you close / liquid is the selling price (BID).

When we open Buy (Long) using the Ask Price, Bid Price on the table then the price should be HIGHER than Price Ask (the price of open Buy position) in order to gain profit.

For ease of position often abbreviated BUY LONG

SELL SHORT or open position is the position in which a trader sells a currency at a certain price and aims to buy later at a lower rendah.Jadi investors benefit from a down market (graph pair down).

SELL SHORT or open is expecting prices of currency pairs (pair) DOWN for profit. Example: Short (SELL) eur / usd then you expect the chart eur / usd is DOWN or euro weakened against the usd.

The fall in the price of a pair also can be interpreted in the currency pair FRONT weakened against the currencies in the pair back. Example: Graph Pair price eur / usd DOWN will mean weakened against the euro usd.

Price that was used during OPEN SELL / SHORT is the selling price (BID) and the prices used when you close / liquid is the purchase price (ASK).

When we open Sell (Long) using the Bid Price, Ask Price at the table then the price should be LOWER than Price Bid (Sell positions open price) in order to get Profit

For ease of position often abbreviated SELL SHORT

» High, Low, Open, Close

1. High: The highest price record of the opening (open) until the end (closing) period. (Example: on the chart period / timeframe of 5 minutes, then the highest price that occurred during the 5 minutes it is a high price)
2. Low: The lowest price record of the opening (open) until the end (closing) period. (Example: on the chart period / timeframe daily, the lowest price that occurred during the day it is a low price)
3. Open: Price opening period. (Example: on the chart period / timeframe of 5 minutes, the price starts at a price of 2.0000. The open price in the range of 5 minutes it is 2.0000)
4. Close: The closing price of a particular period. (Example: on the chart period / timeframe 5 minutes in the example above ends with the price of 2.0050. So close prices in the range of 5 minutes is 2.0050)

» Market Order
Market orders means traders will be trading at prices prevailing at the time. To Buy means the purchase price "ask" in effect at that time also, or to Sell means selling at a price "bid" in effect at that time also

Suppose you would buy a pair EUR / USD, the market was showing 1.2934/1.2938. This means your broker will buy EUR / USD from you at a price of 1.2934 and 1.2938 for sell to you.

» Stop Orders and Limit Orders (Pending Order)
Pending order is an order automatically to open a Long position / Short position only when the price of your order / message is reached. If you order the price is not reached, then the pending order will still be active and will wait until the price that you order untouched. Pending orders can be divided into 2 of Pending Order Pending Stop and Limit Orders.

If you only want to buy at ANY price now, use the Buy Stop Order. And if you just want to sell at current prices DOWN, use the Sell Stop Order.

If you only want to buy at current prices DOWN, use a Buy Limit Order. And if you just want to sell at ANY price now, use the Sell Limit Order.

Example: ASK Price now is 2.0000 and you just want to buy (LONG) if the price moves to 2.0050 then you can use the Buy Stop Order. (Remember the open buy / Long price used is the price of ASK!)

Example: The current BID price is 2.0000 and you just want to sell (SHORT) if the price moves to 1.9950 then you can use a Sell Stop Order. (Remember the open sell / short the price used is the BID price!)

Example: ASK Price now is 2.0000 and you just want to buy (LONG) if the price moves to 1.9950 then you can use a Buy Limit Order. (Remember the open buy / Long price used is the price of ASK!)

Example: The current BID price is 2.0000 and you just want to sell (SHORT) if the price moves to 2.0050 then you can use a Limit Sell Order. (Remember the open sell / short the price used is the BID price!)

» Active period of Pending Order

1. GTC (Good Till Cancelled)
   Good Till Cancelled means the pending order will remain active without any time limit, unless the trader cancel it manually. GTC is the default of Pending Order
2. GTD (Good Till Date)
   Good Till Date means the pending order will remain active until the time limit set
3. OCO (Order Cancels Other)
   Order Cancels Other means traders ordered two pending orders at once. If one of the pending order is touched, then the other orders will be canceled automatically

» Calculating Profit / Loss (Gain / Loss)
The smallest price movements calculated in units of point / pip. The value of each point is varied according to the type of currency pairs (pair), the contract size is used.

Contract size is usually specified in units of lots, Standard lots (100,000), mini lot (10,000), or Micro lot (1000).

There are three types of Currency Pair (Pair):

1. Direct Rates
   Is a pair with USD as the counter currency (USD situated at the rear), for example: GBP / USD, EUR / USD, AUD / USD, and NZD / USD
2. Indirect Rates
   Is a pair with USD as the base currency (USD situated in front), for example: USD / JPY, USD / CHF, USD / CAD
3. Cross Rates
   Pairs which do not involve USD, for example: GBP / JPY, EUR / JPY, AUD / JPY, EUR / GBP, and GBP / CHF

For example Direct Rates currency (GBP / USD, EUR / USD, AUD / USD, and NZD / USD) method of calculating profit / loss are as follows:

(Selling Price - Buying Price) x contract size x lot = Calculation of profit / loss

Example:

1. Buy 3 standard lot of EUR / USD 1.2000
   Sell ​​(liquid) 3 lots of EUR / USD 1.2010

   Profit = (1.2010 - 1.2000) x 100,000 x 3 = $ 300

2. Sell ​​1 standard lot of GBP / USD 2.0001
   Buy (liquid) 1 lot of GBP / USD 2.0000

   Profit = (1.2001 - 1.2000) x 100,000 x 1 = $ 10

Special ending currency / USD, there is a way that is easy calculation:
From the above conclusion, it means a profit of 1 point for standard lot (100K) currency ends / usd profit is $ 10. While the value of 1 point for a mini lot (10K) is $ 1 and for micro lots (1K) per point is worth $ 0.1

For example, currency Indirect Rates (USD / JPY, USD / CHF, USD / CAD) method of calculating profit / loss are as follows:

[(Selling Price - Buying Price) / Price Liquidation] x contract size x lot = Calculation of profit / loss

Example:

1. Buy 1 standard lot USD / JPY 110.00
   Sell ​​(liquid) 1 lot of USD / JPY 110.01

   Profit = [(110.01 - 110.00) / 110.01] x 100,000 x 1 = $ 9.09

Currency Cross Rates For instance (GBP / JPY, EUR / JPY, AUD / JPY, EUR / GBP, and GBP / CHF) method of calculating profit / loss are as follows:

{[(Selling Price - Buying Price) x Rate Base Currency Current] / Pair Current Rate} x contract size x lot = Calculation of profit / loss

Example:

1. Sell ​​1 lot of EUR / USD at price 0.6760 (EUR / USD is the base currency of EUR / GBP, because the front of the EUR / USD is the Base Currency)
   Buy (Liquid) EUR / USD at price 0.6750
   Rate EUR / USD: 1.1840

   Profit = {[(0.6760 - 0.6750) x 1.1840] / 0.6750} x 100,000 = $ 175.4

» Margin and Leverage
The term leverage (leverage factor, typically in a ratio of 1:50, 1:100 and 1:200) in the forex margin trading means that if you want to trade for $ 10,000, you do not need to provide $ 10,000 but sufficient, providing a margin of $ 100 (leverage 1:100) as a guarantee fund to your broker.

So the margin can be interpreted as guarantees held by the broker when you make trades. Margins will be returned to your account immediately after you close / open your liquid position.

Suppose you have $ 1,000 in cash broker that has 1:100 leverage. This means you can trade with the amount to nearly $ 100,000 (or almost 100X fold your capital). This also means that to use a $ 100,000 contract size you need a 1% margin of $ 1000.

Another example: You have a capital of $ 500 and your broker has a leverage of 1:100, so if you want to buy using 1 mini lot (10,000) then the margin on hold for just 1% of the total contract sizenya (10,000) ie (1% x 10,000) or using a margin of $ 100.

This means your capital to be held temporarily and are pledged as collateral / margin by a broker is $ 100, the remaining $ 400 is used to hold your loss.
And if one day you have to liquidate that position then the margin of $ 100 earlier will be returned to you.

The advantage of the leverage is with a smaller capital you can trade with a number of contract size / lot the same as if you do not use leverage.

Or it can be said, with equal capital, you can use the contract size is greater than not using leverage. So with the same capital, you have a chance to get profit per pip is greater.

With or Without Leverage Leverage? (Assuming a capital of $ 1000, using 0.01 lot)

» How Margin Calculation

There are three types of Currency Pair (Pair):

1. Direct Rates
   Is a pair with USD as the counter currency (USD situated at the rear), for example: GBP / USD, EUR / USD, AUD / USD, and NZD / USD
2. Indirect Rates
   Is a pair with USD as the base currency (USD situated in front), for example: USD / JPY, USD / CHF, USD / CAD
3. Cross Rates
   Pairs which do not involve USD, for example: GBP / JPY, EUR / JPY, AUD / JPY, EUR / GBP, and GBP / CHF

Margin Calculation Method Direct Rates (GBP / USD, EUR / USD, AUD / USD, and NZD / USD):

Margin Percentage x Contract Size x Lot x Price Now = Margin

Example:

1. Sell ​​3 mini lots EUR / USD at Bid 2.0000 (Remember the open-Sell using the bid price!)
   0.01 x 10,000 x 3 x 2.0000 = $ 600 (Leverage 1:100)

Margin Calculation Method Indirect Rates (USD / JPY, USD / CHF, USD / CAD):

Margin Percentage x Contract Size x Lot = Margin

Example:

1. Buy 2 mini lots of USD / JPY at 110.00 Ask (Remember to use the ask price Buy open!)
   0.01 x 10,000 x 2 = $ 200 (Leverage 1:100)

Margin Calculation Method Cross Rates (USD / JPY, EUR / JPY, AUD / JPY, EUR / GBP, and GBP / CHF):

Margin Percentage x Contract Size x Lot x Middle Price (*) Now = Margin

Middle Price (*) = (Ask Price + Bid Price) / 2

(Do not forget Base Currency Exchange is located in front of the base pair. For example, pair EUR / GBP -> EUR is the Base Currency, USD is the quote currency)

Example:

1. Buy 1 mini lot of EUR / USD at 0.8020 Ask price (Remember to use the ask price Buy open!)
   Price Bid / Ask EUR / USD 1.5800/02 (due to the Base Currency is EUR, the price used is the price of EUR / USD)

   Price was EUR / USD = (1.5800 + 1.5802) / 2 = 1.5801

   0.01 x 10,000 x 1 x 1.5801 = $ 158.01 (Leverage 1:100)

» Profit Target, Stop Loss and Trailing Stop
Target profit is an order to liquidate a position automatically at a specified price when the trader has obtained a number of profit.

• For Buy / Long then the target is located ABOVE the position opening price Buy / Long.
  (Remember! Buy / Long using ASK, Take Profit or Stop Loss based on BID)

  Example: Buy EUR / USD 1.2000, Target 1.2050 Profit (for profit target of 50 points)

• For Sell / Short position, a target located at a position opening price BELOW Sell / Short.
  (Remember! Sell / Short using BID, Target or Stop Loss based on ASK)

  Example: Sell EUR / USD 1.2050, Target 1.2000 Profit (for profit target of 50 points)

Stop Loss is an order to liquidate a position automatically at a certain price to limit losses that might occur if the market moves against the trader's position.

• For Buy / Long position, stop loss is located at a position opening price BELOW Buy / Long.
  (Remember! Buy / Long using ASK, Take Profit or Stop Loss based on BID)

  Example: Buy EUR / USD 1.2050, Stop Loss 1.2000 (stop loss 50 points for loss)

• For Sell / Short position, stop loss is located ABOVE the price of your open position Sell / Short.
  (Remember! Sell / Short using BID, Target or Stop Loss based on ASK)

  Example: Sell EUR / USD 1.2000, Stop Loss 1.2050 (stop loss 50 points for loss)

Stop Loss can also serve to protect the profit that you have obtained (lock profit). The way is by changing the position of stop loss upward (to Buy) or down (to Sell).

Example:
A trader Open Buy at 2.0000, TP (take profit) at 2.0050, SL (Stop Loss) at 1.9970. After a while, the price has moved into the expected direction (up) at the position of 2.0040. In this case the trader is located on floating profit position (open position and in a state of profit) by 40 points. To protect profit as much as 20 points, the trader can move the stop loss at open price + 20 points, which is 2.0020. Why 20 points? Condition is the profit you want to lock, must be smaller than the current floating profit (20 <40 points). When the floating profit then move to 60 points, the trader can raise the stop loss to 2.0040 to lock the position of profit of 40 points, and so on. This is the basis of the trailing stop.

After filling Take Profit and Stop Loss, then the data will be stored on the server Forex Broker. So you do not have to worry about and can always turn off the computer / internet connection is disconnected. Take Profit and Stop Loss will work WITHOUT having to turn on the computer and connect to the internet via a forex broker

Trailing Stop is a facility provided by forex brokers who can change the stop loss to lock in profits automatically in multiples of a certain amount. Trailing Stop is the development of stop loss.

Trailing Stop is generally only works when the trader's position PROFIT HAS MORE THAN THE MINIMUM VALUE OF CERTAIN predetermined broker (eg minimum 15 points). (IMPORTANT: Generally trailing stop running locally on your computer, not on the server broker! If your computer is dead, trailing stop also becomes active)

So if you do not profit more than the minimum amount that you set a trailing stop, that his position is still DANGEROUS (unless you've used a stop loss). So you should set your stop loss first, then if necessary you can add trailing stop feature as a complement. By using this feature you will avoid profit loss if you have exceeded the minimum trailing stop.

Example:
Buy EUR / USD 1.2050, 1.2000 Stop Loss, Trailing Stop 15 points.
When the current BID prices have been at 1.2070 (had profit of 20 points) then the trailing stop will adjust the price of stop loss to 1.2055 (20 points profit minus 15 points, +5 points of profit). This means that your profit has been locked by 5 points (on the position of new stop loss is at 1.2055).

Point A: And if the price were to move down to 1.2055 then it will automatically be liquidated on a profit of 5 points. This means you are no longer possible loss because it has been locked.

But if prices do not go down (as per point A) but prices continue to rise from 1.2050 to 1.2095 (had 45 points profit) then the trailing stop will adjust the price of stop loss to 1.2080 (45 points profit minus 15 points, +30 points of profit). This means that your profit has been locked by 30 points (on the position of new stop loss is at 1.2080).

» Margin Call
Margin call means the liquidation is "forced" by a broker because your account does not have sufficient funds to cover / cover your positions are losers.

The basis for determining the Margin Call is usually there are 2 (dependent regulation of each broker):

1. Margin Level
   The system margin level used on the MetaTrader platform. (Please do order a demo account so you better understand the calculation of the margin on the MetaTrader platform)

   Level margin calculation formula is:

   Level Margin = Equity / Used Margin X 100%

   Margin = Equity + Free + Profit Margin - Loss

   Capital Balance = current actual (not reduced profit & loss)

   Equity is your Balance after plus / minus profit & loss

   By the time all positions clear (no open), Balance = Equity. Because the margin used = 0, Profit / Loss = 0, so it becomes the same as the Free Margin Balance. (See Equity formula above!). Free Margin is money you can withdraw if there are open positions (reserving funds free margin sufficient to withstand losses and prevent Margin Call)

   For instance the broker determine if Margin Margin Call Level 100%, then if the "margin used" x 100% = Equity, margin call will occur. (One at a time of open positions will be closed automatically by the broker to the trader sufficient funds to cover the loss).

   In MetaTrader platform, a trader does not need to calculate Margin Level manually, because when there is an open position Margin Level will automatically appear in the tab "Trade" in units of percent (%). Traders need to do is to keep the Level Margin Margin Call is not a broker close to the limit. (Eg 100%)

2. The initial capital - Margin - Loss = 0
   There are also brokers that determine margin call when the initial capital - Used Margin - Total Loss = 0. (This also can you imagine that the broker is using the Margin Level 100% when using MetaTrader calculation)

   Initial deposit of $ 300. If a trader opens a position trading GBP / USD mini lots (10000) requiring margin: 10000 (mini lot) x 0002 (1:500) x 2.0000 = $ 40. The capital is held temporarily as collateral (margin) to open 1 mini lots gbp / usd is $ 40. So the rest of the trader's margin to withstand loss is: $ 300 - $ 40 = $ 260

   When the floating loss (loss) you reach $ 260 then there is no margin / funds remaining to hold losses, so one by one position will be closed automatically by the broker. Then the margin of $ 40 is locked temporarily as collateral to open a position of GBP / USD is, going back into your account after the position is clear / close so your margin remaining $ 40 only).

» Calculation of Interest / Swap / Rollover / Interest to Stay
Interest / Swap / Rollover / Interest Stay is interest earned or paid traders if there are open positions more than a trading day. Limit one day trading is that if the position is not closed until the closing time of the world Forex market, namely at the time Market closing at 16.00 New York (New York time).

To convert the time New York to your local time, please go to: http://www.timeanddate.com/worldclock

When trading forex, which used the actual day is 2 days ahead. Example: Trading on Thursday, then the actual day is Monday (interest calculated as 1 day). Trading on Friday then the actual day is Tuesday (interest calculated as 1 day), and so on. While special for the day Wednesday, the day actually was 3 days, ie Friday, Saturday and Sunday. (Interest is calculated 3 days). Although Saturday and Sunday closed the forex market, interest was calculated 3 days off as compensation for trading.

In the calculation of interest: Traders will earn positive if the currency purchased an interest rate greater than the borrowed

Example:
Pair USD / JPY. USD Swap Rate = 5.25%, Interest Rate JPY = 0.5%
Buy USD / JPY means a trader is buying USD by borrowing JPY. Because the interest rate currency bought (USD) is greater than borrowed (JPY), the trader will get an interest rate: 5.25% - 0.5% = 4.75% If a trader Sell USD / JPY (meaning borrow USD and buy JPY), it will be charged by: -5.25% + 0.5% = -4.75%

Example 2:
Pair EUR / USD. Interest rate EUR = 3.75%, Interest Rate USD = 5.25%
Buy EUR / USD means a trader buys EUR by borrowing USD. Because the interest rate currency bought (EUR) is smaller than borrowed (USD), then the trader will be charged by: 3.75% - 5.25% = -1.5% If a trader Sell EUR / USD (meaning buying USD and borrow EUR) , then it will get an interest rate: -3.75% + 5.25% = 1.5%

Any Forex broker typically provides lists interest rates (per day) for each pair is used. The list usually includes interest charged to posis Buy and Sell. (Can be in the $ or the point). If the point the trader must first convert into dollars by calculating the value per point pair in question.

» Hedging Techniques
Hedging is a situation where we are opening two opposite positions in the currency and the same number of lots. Often hedging is used if the price reverses direction, and traders do not want to cut losses grow large without loss (closed position despite loss). In general, they use this technique without a stop loss. Another term of the hedging is locking.

Example: A trader open Buy EUR / USD 1 lot and the price did not move as expected (down) and the position is still floating loss (loss of floating) 20 points, the trader can do open Sell EUR / USD 1 lot in the same currency so that the loss is locked by only 20 points. Although the price moves in any direction, floating loss remained 20 points

» Average Technique
Averaging is one way to minimize losses by opening similar positions at different levels. The purpose of this averaging is to use the average of the differences in price levels are ordered to minimize loss.

Example: A trader open Buy EUR / USD 1 lot at 2.0100 price, but prices go down to as low as 2.0000 so that the experience of floating-point loss -100. Traders can perform averaging by opening a Buy EUR / USD 1 lot at 2.0000 price on the spot. This means there are two open positions. The first position -100 floating-point loss. The second position is 0 points. (Assuming no spread).

If then the price moves up towards 2.0050 first then floating loss position -50 points, second place 50 points profit. In total the two break-even position (BEP). When the price moves up above 2.0050. It means a trader has been profit.

Besides these techniques, there is also a technique known as Forex techniques Trapping:

CLICK HERE for an explanation of Forex Trapping

CLICK HERE for an explanation of Forex Trapping 2