DAY TRADING the FINANCIAL MARKETS
- As a Forex Trader you want to know about the markets – FOREX CHARTS. Worldwide Central Banks – Interest Rates. Mirror 2
- If you are going to trade Indices, Stocks, Commodites, Bonds, Cryptocurrency or something else then you will pic one of those markets.
- You need to get a feeling for the market pairings, watch them.
- Pick one market from the list or choose one by your own. It really doesnt matter. Try to pick a market that is more active. You need to see a very active market. Volatility ist good to learn the market structure.
- Fine, finally you have picked your favor market from the financial sektors! The next step is to focus the next weeks, month and years this market.
- You are going to be a Day Trader, so watch the financial markets daily!
HANDLING TRADES
DETAILS TO THE TOPICS – COMING SOON
- Important Keywords and meanings
- How to manage trades inside finacial markets?
- What is the core of a trade?
- How to set a trade?
- How to control a trade?
- Universal investment positioning
- Trade directions
- Types of trading directions
- Up
- Down
- Sideways
- Trade sizes
- How do i pick a good trade size?
- Trade directions
- Risk Management
- Time
- Days
- Weeks
- Month
- Cycles
- Situation
- Market-Patterns
- Structures
- Details
- Actions
- How to decide to act or not
- How to calculate things that you don’t know
- Time
What are the base keywords and meanings that i need to know about trading?
| Keyword | Description | Examples or/and equivalent keyword |
| Chart | A two coordinate graph, based on time and price. | x coordinate = time y coordinate = price |
| Long | With a "Long-Trade" you speculate for future rising prices. | Buy-Trade: You buy a financial product and sell it on higher prices to realize profit. Otherwise you will loose money. |
| Short | With a "Short-Trade" you speculate for future falling prices . | Sell-Trade: You sell a financial product and buy it on lower prices back to realize profit. |
| Lot Size | The size of a trading position that you buy or sell. If you place a trade you have to decide how much value you want to trade. This is named in general "Lot-Size". Also called Position-Volume. Check your broker for min.-max. values. | A standard lot represents 100,000 units of any currency, whereas a mini-lot represents 10,000 and a micro-lot represents 1,000 units of any currency. Depends on your broker. |
| Digits | The number of digits after a decimal point, which defines the price accuracy of the financial product. More digits have less impact on the overall price movement and value. Less digits change faster the overall value of the financial product when price moves. | Common is 5, 3 or 2 digits after a decimal point. It is very important to know your markets and to know how much the average price moves are on a daily basis in common. |
| Pips | A pip, short for "percentage in point" or "price interest point". Pips are the most basic unit of measure in forex trading. | 1 Pip = 10 Basis-Points. If the price moves +/- 0.00010 (in a 5 Digit-Market) then it is called 1 Pip |
| Points | A Point is one 10th of a Pip. | If the price moves +/- 0.00001 (in a 5 Digit-Market) then it is called 1 Point |
| Slippage | If you buy a trade-position and the market is more volatile at this time, you may don't get the "order-price" that you wanted. The difference to your real order price is called slippage. Usually calculated in points. | Slippage can happen on Orders and direkt market buy-in positions. |
| Stop Loss | A price-level that closes your active trade-position and realizes a loss. Used to quit opend positions when the market turns against you. You can limit your loss. Slippage is possible. | You buyed a position at a price like 1.12345. You set your Stop Loss to a price like 1.12300. (Visible now as a Long-Trade). Your order will close at 1.12300 if the market price hits this value. You realize a loss, because the trade went short against your trading direction. |
| Trail Stop | A Stop Loss that moves behind your trade to secure your profits on a opend position. | If you have a 100 point Trail Stop - It will stay always 100 points behind your current trade price at any given time. If market price turns against you it stays there and doesnt move. If it hits the Trail Stop marker your trade gets closed and you realize your profit to that price-level. Does not help if your position is not in profit, then it acts as a normal Stop Loss marker. |
| Take Profit | A price-level that closes your active trade-position and realizes a profit. Used to quit opend positions when the market goes in your trading direction. You can limit your profit. Slippage is possible. | You buyed a position at a price like 1.12345. You set your Take Profit to a price like 1.12400. (Visible now as a Long-Trade). Your order will close at 1.12400 if the market price hits this value. You realize a profit, because the trade went long into your trading direction. |
| Stop Level | The Stop Level parameter indicates the “channel of prices (in points) from the current price, inside which one can’t place Stop Loss, Take Profit and pending orders.” | Check this for every market and every broker. |
| Freeze Level | A pending order, which is away from the current market price at a distance equal to or within the freeze level, cannot be modified, deleted, or prematurely closed. | Check this for every market and every broker. |
| Magic Number | An identifier number for trades. Used with robots to identify which robot opend the trade. Used to handle specific trades by software. | Can be a self defined number for long and short trades. You can use it also a a unique number only once. |
| Pending Order | 4 Types possible: Buy Limit, Buy Stop, Sell Limit, Sell Stop | Pending orders get written into the Order-Book. |
| Buy Limit | A Buy-Order placed below the current market price, called a pending Order. | If market price hits this level, your order will get filled. Slippage possible. |
| Buy Stop | A Buy-Order placed above the current market price, called a pending Order. | If market price hits this level, your order will get filled. Slippage possible. |
| Sell Limit | A Sell-Order placed above the current market price, called a pending Order. | If market price hits this level, your order will get filled. Slippage possible. |
| Sell Stop | A Sell-Order placed below the current market price, called a pending Order. | If market price hits this level, your order will get filled. Slippage possible. |
| Order | An inactive trade-position that is places inside the market Order-Book. | If the market price hits this price-level from your order, then your order gets filled and your trade becomes active. Slippage can happen. |
| Position | An active trade-position. | |
| Order-Book | A list that holds Buy-Limit, Buy-Stop, Sell-Limit, Sell-Stop orders, that are placed on different Price-Levels from all traders in this market. | Gets updated on market activity. Can be manipulated in seconds easy, so dont trust what you see. |
| Time and Sales List | A chronological list by time of all buying and selling contracts with volume size for a market. | Gets updated on market activity. |
| Price-Level | It can be a single price or a range of start to end price, in a financial chart. | 0.12501 or from 1.12345 to 1.12350 |
| Volume | The contracts Buy & Sell activity of a financial product. Depends on the activity and money volume from all traders in a market. | |
| Tick | A incoming price and volume change to any given time. | The more active the market is the more Ticks you will get. |
| Bid | The current price lower end. | If you buy a Short-Trade position, you will buy it at the Bid-Price. |
| Ask | The current price upper end. | If you buy a Long-Trade position, you will buy it at the Ask-Price. |
| Swap | In general a fee that your broker takes for opend positions. | The fee value can be different for Long and Short Trades. The fee can be positive or negative for Long and Short Trades. |
| 3-days Swap | A fee in forex and CFD trading for overnight positions. The value is a fee for 3 days. | Usually calculated on Wednesday to Thursday night. |
| Rollover Fees | Called Swap - You will pay a fee to you broker if you hold a trading position over night. | Different for any market. Check this up in front, to know when it gets calculated and how much the fee-value is. |
| Base-Currency | It is the first currency in a currency pair. | In forex, currency pairs are written as XXX/YYY or XXXYYY. Like EUR/USD -Here, EUR is the base currency and USD is the quote currency. |
| Spread | The price difference between Bid and Ask price. Can be fixed or floating. Depends on your broker and trading account. | A floating Spread is based on the market volatility at any given time. But has still a minimum fixed from your broker. |
| Margin | A money value that you have to deposit up in front as a security to open a trade-position over your broker. No margin = no trade. | If your trade-size position is higher as your real money value inside your trading-account your order will not get filled. Always check your |
| Order-Filled | Your order/trade is executed and is now active. | You can buy trade-positions via orders on price-levels or directly at market prices. In both ways your order gets filled. |
| Timeframe | A Time-Period used to gather the market activity (price moves) together in a certain amount of time, to one bar/candle/point in a chart. The smaller the timeframe is, the more price moves are visible. Every timeframe has a different visual representation of the market data when you spectate a chart. You can scale the data to different timeframes. | Can be from 1 Tick to any size of Time-Period. Common is: 1min, 5min,15min, 30min, 1hour,4hours,1day,1week, 1month, 6month, 1year, 5years, 10years |