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The moving average (SMA) and the Exponential Moving Average (EMA)

The simple moving average is one of the most popular and simplest forex indicators. It is the average price of the base currency over a certain period of time. Lets say we have 60 closing prices for the last 60 days. Then you sum up the price and divide the result by 60. Equal weighting is given to each daily price.

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The most popular currency pairs

Forex trading involves currency pairs for all major world currencies.The most liquid and heavily traded pairs are:

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Pips and Lots

Pips and Lots in Forex

Any forex beginner finds references to the currency trading pip. Your wins and losses are calculated in pips. Also the forex spread (the difference between the bid and the ask price) is evaluated in pips. Actually, the spread is how the the ECN brokers make money (Types of Brokers). PIP stands for Percentage in Point (otherwise, price interest point). It is the least increment of changes in rates of the currencies. The introduction of such a unit enables us to evaluate a climb or a drop in the currency values in percentage.

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Advantages of Forex

advantages of forex

Advantages of Forex

Since the forex market is a free and unregulated market. The dynamics of forex is shaped and dictated by the flow of orders and the market conditions of supply and demand. National banks sometimes interfere to correct and modify unwanted exchange rate fluctuations in its nation's currency.

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