Currency Pairs

To begin trading FOREX, it is wise to first understand what you are actually trading. So this is a short section on currency pairs. There are many jargons and slang used in the world of FOREX especially when it concern currency pairs. I will attempt to also include them in this section. In the box below, I will place the currency abbreviation and the respective currency next to it so currency pairs are clear. I will only describe some of the most commonly traded pairs in this entry.

Abbreviation	Currency
USD	U.S. Dollar
JPY	Japan Yen
CHF	Swiss Franc
GBP	Great Britain Pound
CAD	Canadian Dollar
AUD	Australia Dollar
NZD	New Zealand Dollar

The Majors
The majors are the 4 most commonly traded currencies in the world. They include EUR/USD, USD/JPY, USD/CHF and GPD/USD. The first two are just know as the Euro and the Yen respectively. The third pair is often known as the Swissy and the last is the Pound or sometimes called the Cable.

The Commodity Dollars
The other 3 currency pairs commonly traded are known as commodity dollars or the comdolls for short. These currencies have a strong correlation with prices of commodities. This is because the corresponding countries have significant portions of their economies tied to mining (e.g. gold) and the export of oil. These currency pairs are USD/CAD, AUD/USD, NZD/USD.

The Crosses
You might noticed that all the mentioned currency pairs so far all have USD in them. Crosses are any other currency pairs which does not involve USD. Commonly traded currency crosses includes EUR/GPD, EUR/YEN, EUR/CHF, AUD/NZD. Every currency cross has its own characteristics. Some crosses are extremely volatile while others remain in a tight range. It is best to observe how crosses behave in relation to the majors before starting to trade them.

First things first

1. Who am I?
31 year old bloke who took the plunge to venture into FOREX trading a year ago. This blog is created to share my experiences, trials and tribulations, hits and misses. Trades will be updated on this blog. The blog also serves as a personal record and I will use it to make myself a more disciplined trader. I had limited success and still trying to improve myself. I just want to share my future experiences here with like-minded people.

I assumed that if you are reading this blog, you are at least familiar with the internet and capable of doing online searches. I will not waste time trying to explain every nitty gritty detail. I will write up some basic stuff and jump right into trading in 2009. I will update certain articles as I go along. I do not believe in those dodgy courses that are frequently advertised. I believe that every single individual is a unique investor/trader. One method does not fit everyone. Part of the fun is in the journey. Take pride in your own learning and I believe that you will be rewarded. The trades which I intend to write on this blog are intended for your reference only. I would like to as much as possible make every trade posted profitable. I hope that you will exercise your own discretion and adapt my methods into your own trading systems.


2. What is FOREX?
It is the simultaneous buying of one currency while selling another. Sounds complicated? No quite. For example, when you go on a holiday in a foreign country, you change some of your currency to the local currency. That itself is a form of forex trading. But the FOREX we are dealing here is on a much bigger scale and there are certain norms and rules. All FOREX deals are quoted in pairs, e.g. EUR/USD is currently trading at 1.4091

3. Where to find more information?
There are many places to find information. My favorite websites include

www.babypips.com
A very detailed site with step by step guiding for beginners. If there is any term which is unfamiliar to you in this blog, you can refer to the FOREXPEDIA section in this site.

wwww.dailyfx.com
Wonderful site with analyst comments and daily updates. One of the most useful websites for me.

You can also find this book useful. It is written by a local author and easily available in common bookstores.

Handbook on FOREX trading
An easy guide to profitable currency trading
by Nicholas Tan. Published by Rank Books.

4. How to begin?
There are many platforms available in the market. I am using Philips Securities POEMS because I also have other investment with them. Other choices include IG markets , DB FX , Saxo Markets and many more. There are also other foreign brokers but do take note of transfer charges like TT etc. Most of these platforms offer basic charting so you do not need to get another charting software.

5. Why FOREX ?
• It is the largest and most liquid market in the world. Orders are always executed immediately at current prices.
• Trade anytime of the day except weekends. You do not have to quit your day job. Most platforms allow you to enter predetermined orders so trades can be executed even when you are not monitoring closely.
• Potentially high returns (high risk, high return). Forex trading is not for everyone. The standard leverage is often 50-100 times and one can lose the entire investment overnight. To succeed in forex, one has to be disciplined and be prepared to spend some months on it.
• No middle man like fund managers and you are responsible for your own return. There had been many scandals in recent months and sometimes it might be more prudent to take things into your own hands rather than leaving it to the so called “experts”