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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 transaction that traded currency (currency) of a country against foreign money (currency) other countries. With an average daily volume of U.S. $ 2 trillion, the Forex Market 46 times greater than all the combined market shares and therefore most liquid market known in the world. Forex Market is a market which is open for 24 hours continuously

» How to Work the Forex?
Forex trading (Forex) is the exchange of one currency against other currencies in order to gain profit (profit) from the difference in currency values. For example:

A trader to profit from the transaction BUY Pounds Sterling (Great Britain Pounds / GBP)

* $ 10,000 x 1.9800 = U.S. $ 19.800
(10 000 GBP trader bought by selling U.S. $ 19,800)
** $ 10,000 x 2.0000 = U.S. $ 20,000
(10 000 GBP trader selling by buying U.S. $ 20,000)

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

Cross Rate is a currency pair (pairs) that do not contain the official currency of a country where currencies are traded, for example, forex transactions are conducted in America (the official currency is USD). This means that a currency pair that does not contain a cross rate from EUR to USD. Examples are the GBP / JPY, EUR / GBP, etc.. Pairs that do not contain the USD and EUR are called euro involving cross like EUR / GBP.

Currency pairs (Pairs) consists of two different currencies quote. Currency which is located on the left is the base currency. for example on the GBP / USD the GBP is the 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 EUR 1 worth U.S. $ 1.25.

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

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

Pair EUR / USD:
To forecast the EUR strengthened against the USD, you can do to BUY EUR / USD
For the prediction of USD strengthened against the EUR, you can do SELL EUR / USD

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

» Major Currencies
The main currencies are common and are often traded in the world is:

» World Forex Market
Forex market is a market that is open 24 hours continuous five days per week. The table below us for a second that is based on the New York Times when the Day Light Saving Time (DST) and Eastern Standard Time (EST or ET). Starting on March 9, 2008 - November 2, 2008 using the DST (GMT 11 hours faster than the NY Time DST), while starting 2 November 2008 - March 8, 2009 using the EST (GMT 12 hours faster than the NY Time 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 movements in the forex. One point (pip) for 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.
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) which is often used is the Standard Lot, Mini and Micro Lot Standard Lot Lot with $ 100,000, Lot is $ 10,000 Mini and Micro Lot is $ 1,000.
If your forex broker supports the 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 / rate currency
Forex quotes consist of the price of two prices, ie a lower price (Bid) and a higher price (Ask / Offer).
Bid is the price you sell to the forex broker (dealer) or the price at which forex brokers (dealers) to buy from you. While Ask / Offer is the price you buy from forex broker (dealer) or the price at which forex brokers (dealers) want to sell to you. Bid is generally lower than the Ask.

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

Quote from forex looks like this:

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

Examples:
You open BUY (Long) EUR / USD at 1.2296 price (Ask), then if Bid now shows the price of 1.2293, that means you still at -3 pips loss. Therefore, every time you open a position certain to occur at a spread of minus (ie, for example 3 for the EUR / USD). To get the profit you have to wait until the price bid on the table INCREASED the price of more than 1.2296

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

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

* TP = Take Profit
SL = Stop Loss **

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

BUY LONG or open is to expect the price of a currency pair (pair) INCREASED order to profit. (Graph pair up) Examples: Long (BUY), eur / usd then you expect the graph eur / usd is INCREASED or the euro strengthened against the usd.

Rising price of a pair you can also interpret the currency in the pair FRONT currency strengthened against the pair behind them. Example: Graph the price pair eur / usd INCREASED it means that the euro strengthened against the usd.

Price used as 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) uses the Ask Price, Bid Price on the table then the price should be higher than Ask Price (the price of an open Buy position) in order to gain profit.

To ease often abbreviated BUY LONG Position

SELL SHORT or open position is a position where a trader sells a currency at a specified price and aims to buy later at lower prices rendah.Jadi investors benefit from a market which declined (graph pair fall).

SHORT SELL or open is to expect the price of a currency pair (pair) DOWN for profit. Example: Short (SELL) eur / usd then you expect the graph eur / usd is going down or the euro weakened against the usd.

The lower the price of a pair you can also interpret the currency in the pair FRONT currency weakened against the pair behind them. Example: Graph the price pair eur / usd DOWN it means that the euro weakened against the usd.

Price used as 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) uses the Bid Price, Ask Price on the table then the price should be lower than the bid price (the price of open Sell position) in order to get Profit

To ease often abbreviated SELL SHORT Position

» High, Low, Open, Close

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

» Market Order
Market orders mean that traders will enter into transactions at prices prevailing at the time. To Buy means purchase price "ask" in effect at that very moment, or to sell means sell at a price "bid" in effect at that time also

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

» Stop Orders and Limit Order (Pending Order)
Pending orders are orders to automatically open the Long position / Short only when the price of your order / message is reached. When you order price has not been achieved, the pending order will still be active and will wait until the price of your order is untouched. Pending orders can be divided into two namely Pending Pending Order and Stop Limit Order.

If you just want to buy at THE 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 just want to buy at current prices DOWN, use a Buy Limit Order. And if you just want to sell at THE 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 price is 2.0000 and BID now you just want to sell (SHORT) if the price moves to 1.9950 then you can use the Sell Stop Order. (Remember the open sell / Short 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 the Buy Limit Order. (Remember the open buy / Long price used is the price of ASK!)

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

» The period of active Pending Orders

1. GTC (Good Till Cancelled)
   Good Till Cancelled means the pending order will remain active without any time limit, unless the trader did cancel it manually. Default of the GTC is a 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 mengorder two pending orders at once. If one of the pending order is touched, then the other order is automatically canceled

» Calculating Profit / Loss (Gain / Loss)
The smallest price movement is calculated in units of points / pips. The value of each point will vary according to type of currency pairs (pairs), the total contract size used.

Contract size is usually specified in units of lots, ie the Standard lot (100,000), a 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 is situated in 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 is situated in front), example: USD / JPY, USD / CHF, and USD / CAD
3. Cross Rates
   Is a pair that does not contain the USD, for example: GBP / JPY, EUR / JPY, AUD / JPY, EUR / GBP and GBP / CHF

For example Rates Direct currency (GBP / USD, EUR / USD, AUD / USD, and NZD / USD) how to calculate profit / loss are as follows:

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

Examples:

1. Buy three 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 one standard lot GBP / USD 2.0001
   Buy (liquid) 1 lot 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 to calculate:
From the above conclusion, it means that gains a point for the standard lot (100K) ending currency / usd profit is $ 10. While the value of one point for a mini lot (10K) is $ 1 and for micro lots (1K) each point is worth $ 0.1

For example Rates Indirect currency (USD / JPY, USD / CHF, and USD / CAD) how to calculate profit / loss are as follows:

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

Examples:

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

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

For example Cross Rates currency (GBP / JPY, EUR / JPY, AUD / JPY, EUR / GBP and GBP / CHF) how to calculate profit / loss are as follows:

([(Sales Price - Purchase Price) x Rate Base Currency Current] / Pair Current Rate) x contract size x lot = Calculation of profit / loss

Examples:

1. Sell 1 lot EUR / GBP at 0.6760 price (EUR / USD is the base currency of EUR / GBP, because the front of the EUR / GBP is the Base Currency)
   Buy (Liquid) EUR / GBP at 0.6750 price
   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, usually in a ratio of 1:50, 1:100 and 1:200) in the forex margin trading means if you want to trade for $ 10,000, you do not have to provide $ 10,000 but it was enough, providing the margin 100 USD (leverage 1:100) as a guarantee fund to your broker.

So the margin can be interpreted as collateral held by the broker when you can trade. Margin will be immediately returned to your account after you close / open your liquid positions.

Suppose you have $ 1,000 cash at the broker who has the leverage is 1:100. 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 $ 1,000.

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

This means that your capital will be retained temporarily and used as collateral / margin by the brokers amounted to $ 100, the remaining $ 400 is used to hold your loss.
And when someday you have to liquidate these positions so that $ 100 had margins will be returned to you.

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

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

With or Without Leverage Leverage? (Assuming capital of $ 1,000, using the 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 is situated in 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 is situated in front), example: USD / JPY, USD / CHF, and USD / CAD
3. Cross Rates
   Is a pair that does not contain the USD, for example: GBP / JPY, EUR / JPY, AUD / JPY, EUR / GBP and GBP / CHF

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

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

Examples:

1. Sell three mini lot GBP / USD at 2.0000 Bid price (Remember to use an open bid price Sell!)
   0:01 x 10 000 x 3 x 2.0000 = $ 600 (Leverage 1:100)

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

Margin Percentage x Contract Size x Lot = Margin

Examples:

1. Buy two mini lots of USD / JPY at 110.00 Ask price (Remember to use open Buy Ask price!)
   0:01 x 10 000 x 2 = 200 USD (leverage 1:100)

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

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

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

(Do not forget the Base Currency is the currency which is located in front of the base pair. For example pair EUR / GBP -> EUR is the BASE currency, GBP is a QUOTE Currency)

Examples:

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

   Middle price of EUR / USD = (1.5800 + 1.5802) / 2 = 1.5801

   0:01 x 10 000 x 1 x 1.5801 = $ 158.01 (Leverage 1:100)

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

• If you Open Buy / Long the target is located at THE price of your open position of the Open Buy / Long.
  (Remember! Open Buy / Long using ASK price, while Target and Stop Loss by price BID)

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

• If you Open Sell / Short then located in the LOWER price target you to open positions Sell Open / Short.
  (Remember! Open Sell / Short using BID prices, while Target and Stop Loss based on ASK price)

  Example: Sell EUR / USD 1.2050, 1.2000 Profit Target (for the 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.

• If you Open Buy / Long located in the stop loss price BELOW you open a position Open Buy / Long.
  (Remember! Open Buy / Long using ASK price, while Target and Stop Loss by price BID)

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

• If you Open Sell / stop loss Short then located at THE price of your open positions Sell Open / Short.
  (Remember! Open Sell / Short using BID prices, while Target and Stop Loss based on ASK price)

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

Stop Loss can also serve to protect the profits you've got (lock-profit). The trick is to change the stop loss position to the top (to Buy) or down (to sell).

Examples:
A trader at the position of the Open Buy 2.0000, TP (Take Profit) at the level of 2.0050, SL (Stop Loss) at the 1.9970 level. After some time, prices have been moving toward the expected (increase) in the position of 2.0040. In this case the trader is located on a floating position of profit (in a state of open positions and profit) for 40 points. To protect profit as much as 20 points, a trader can move the stop loss at the open price + 20 point, ie 2.0020. Why 20 points? Condition is the profit you want to lock, must be smaller than the current floating profit (20 <40 points). If then a floating profit move into 60 points, a trader can be raised again stop loss to 2.0040 to lock the profit position for 40 points, and so on. This is the basis of a trailing stop.

After input the Take Profit and Stop Loss, so that 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 disconnected. Take Profit and Stop Loss will continue to work without having to turn the computer on and connected to the Internet via a forex broker

Trailing Stop is a facility provided by the forex broker that can change the stop loss to lock automatically profit in multiples of a certain amount. Trailing Stop is an extension of the stop loss.

Trailing Stop is generally only works if the trader's position PROFIT HAS MORE THAN THE VALUE OF CERTAIN MINIMUM predetermined brokers (eg minimum 15 point). (URGENT: Most trailing stop running locally on your computer, not on the broker server! If your computer is dead, trailing stop also become inactive)

So if you do not profit more than the minimum amount that you set a trailing stop, it means that your position is still DANGEROUS (unless you have been using stop loss). So you should set a stop loss first, then if necessary you can add a trailing stop as a complementary feature. By using this feature you will avoid a loss if your profit exceeds the minimum trailing stop.

Examples:
Buy EUR / USD 1.2050, 1.2000 Stop Loss, Trailing Stop 15 points.
If the BID prices have now is at 1.2070 (has 20-point profit) then the trailing stop will change the stop loss to 1.2055 price (20 points minus 15 points profit, ie profit +5 points). This means that your profit has dilock five points (at the position of new stop loss is at 1.2055).

Point A: And if the price turns out then move down to 1.2055 on profit terlikudasi automatic five points. This means you can not anymore because the loss may have been dilock.

But if the price does not go down (according to Point A), but prices continue to rise from 1.2050 to 1.2095 (has 45-point profit) then the trailing stop will change the stop loss to 1.2080 price (45 points minus 15 points profit, ie profit +30 points). This means that your profit has dilock 30 points (on the new position of the stop loss is at 1.2080).

» Margin Call
Margin call means the liquidation of the "force" conducted by the broker because your account does not have sufficient funds to cover / cover your position are the losers.

Margin Call basis to determine there is usually a second (depending on the rules of each broker):

1. Margin Level
   System-level margins are used on MetaTrader platform. (Feel free to place an order with a demo account so you better understand the calculation of margins on MetaTrader platform)

   Level margin calculation formula is:

   Level Margin = Equity / Margin used X 100%

   Equity = Margin + Free + Profit Margins - Loss

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

   Equity is your balance after the plus / minus profit & loss

   At the moment all positions clear (no open), then the Balance = Equity. Because the margin is used = 0, Profit / Loss = 0, so the Free Margin is the same as Balanced. (See Equity formula above!). Free Margin is money you can withdraw it if there are open positions (reserving funds sufficient to hold the free margin of loss and prevent Margin Call)

   For example the broker determine Margin Call occurs if Margin Level 100%, then when "The margin is used" x 100% = Equity, a margin call will occur. (One by one open position will be closed automatically by the broker to the trader's funds sufficient to cover the loss).

   On MetaTrader platform, a trader will not have to calculate the Margin Level manually, because if there are open positions Margin Level will automatically appear on the tab "Trade" in units of percent (%). Traders need to do is to keep the margin level is not approaching the limit Margin Call broker. (Eg 100%)

2. The initial capital - Margins - Loss = 0
   There are also brokers who determine a margin call if 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)

   Deposit the initial capital amounting to $ 300. If a trader opens a position trading GBP / USD mini lot (10000) requires margin: 10 000 (mini lots) x 0002 (leverage 1:500) x 2.0000 = $ 40. So while capital is held as collateral (margin) for opening a mini Lot gbp / usd is $ 40. So the rest of the trader's margin to withstand the loss is: $ 300 - $ 40 = $ 260

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

» Calculation of Interest / Swap / Rollover / Interest Stay
Interest / Swap / Rollover / Interest Overnight represents interest earned or to be paid by the trader if there are open positions exceed one day trading. Limit one day trading is that if these positions are not closed until closing time the world Forex market, which is when the New York market closing at 16.00 (New York time).

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

When trading forex, the actual days used are two days into the future. Example: Trading on Thursday, then the actual day is Monday (interest is calculated one day). Trading on Friday, then the actual day is Tuesday (interest is calculated one day), and so on. Whereas for the day Wednesday, the actual day is three days, namely Friday, Saturday and Sunday. (Interest is calculated in three days). Although Saturday and Sunday closed the forex market, interest is calculated three trading days as holiday compensation.

In the interest calculation: Traders will get a positive rate if the currency bought an interest rate greater than the borrowed

Examples:
Pair EUR / JPY. EUR Interest Rate = 5.25%, Interest Rate = 0.5% JPY
Buy USD / JPY means that traders buy USD JPY by borrowing. Because interest rates currency bought (USD) is larger than the borrowed (JPY), the trader will get the interest of: 5.25% - 0.5% = 4.75% When the trader Sell USD / JPY (mean borrowing USD and buy JPY) then will be charged for: -5.25% + 0.5% = -4.75%

Example 2:
Pair EUR / USD. EUR Interest Rate = 3.75%, Interest Rate USD = 5.25%
Buy EUR / USD means that traders buy EUR USD by borrowing. Because interest rates currency purchased (EUR) is smaller than the borrowed (USD), then the trader will be charged at 3.75% - 5.25% = -1.5% When the trader Sell EUR / USD (meaning buying and borrowing USD EUR) , it will get the interest of: -3.75% + 5.25% = 1.5%

Each forex broker generally provide a list of interest rate (per day) for each pair is used. The list usually includes interest rates charged for posis Buy and Sell. (Either in $ or in point). If the point then the trader must mengconvert dollar used to be a way to calculate the value per point pair in question.

» Hedging Techniques
Hedging is a state where we opened two opposite positions in the currency and the same number of lots. Often hedging is used if prices reversed course and traders did not want to grow large losses without a cut loss (closed position despite the 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, traders can conduct open-Sell EUR / USD 1 lot at the same currency so that losses The dilock only 20 points. Although the price moves in any direction, the floating loss remained 20 points

» Technical Average
Averaging is one way to minimize losses by opening a similar position at a different level. The purpose of this averaging technique is to use the average of the differences in price levels are perpetrated in order to minimize loss.

Example: A trader open Buy EUR / USD 1 lot at 2.0100 price, but prices moved down to the 2.0000 level, so having floating loss -100 points. Traders are able to do by opening a position averaging Buy EUR / USD 1 lot at 2.0000 on the spot price. This means there are two open positions. The first floating loss position -100 points. Second place 0 points. (Assuming without considering the spread).

If then the price moves up to 2.0050 then the first floating loss position -50 points, second place 50 points profit. In total, both the break-even position (BEP). When prices are moving up above the 2.0050 level. It means that traders have been profit.

In addition to these techniques, there is also a technique known as Forex Trapping techniques:

CLICK HERE for an explanation of the Forex Trapping

CLICK HERE for an explanation of the Forex Trapping 2