WinTrader Buy Sell Signal Software Tag: Profit Calculation in FX Currency Pair

  Did you ever think why we are learning road rules before drive a car.?Yes we need to avoid the crashes. If you are in the wrong side definitely there is a chance to crush. Each trader is drivers they are driving their future through the trade, so they should follow some certain rules to go properly. Every trader was a loss trader at their earlier. Means the fault in trading usually happen in the starting time. Why it happens…? Because we have to fall first then we learn how to stand. But there is common reason for their failure, that is, every traders entering in to trade without sufficient knowledge about trade. Sometimes they might lucky and be successful for a while. In the life of every human the luck factor will come ones. But as a trader if you wait for the luck again definitely you will be in great crush. Before discussing the fault of trader I would like to share why most of the persons love to do trade even if it is risk. Because they thought that it’s an easy way to become rich and giving total freedom for us there is no boss and no time schedule. Above all there is no need specific academic qualification. Full freedom to work.  This is exactly right. Trading offers a wide range off opportunity for you. But these factors make the traders lassie and undisciplined. Let see how. Don’t think trading make you rich within few days. There is no one in the history of trade who won in a day because trading is the way to lose money than make money. So every trader should have an ability to act by realize this truth. To become rich is a need but it is symptom of greediness also. This…

In the option market call option have no existence without put option. Put option enable you to sell the underlying index or stock at a predetermined price in future on or before a particular expiry date. Call option and Put option are opposite to each other. But they have some similar characteristics also. The expiry date and strike price of put option is also predetermined by the stock exchange. Unlike call option a put option helps you to fix the selling price. If you expect a possible decline in the future for an underlying asset then you can fix selling price for your put option. To avoid losses pay a simple premium amount. We use put option under bearish market conditions. American put option and European put option are the two different kinds of put options. American option allows you to settle the trade before expiry of the contract. It is more flexible than European option. For example stock option. Rather than American option European option can only be exercised on the expiry date of the contract. For example index options. Put Index option           To maximize your profit the simple rule that you need to follow is buy at low price and sell at high price. First consider put index option trade. Suppose the current market price of Nifty is 6000 and with the expectation that its price will decline future you decided to purchase it at the strike price of 5900. So your premium amount is 1000. That is 10 for each unit and a total of 100 units thus the total premium amount of 1000. If the Index price rises above the current market price you don’t get any benefit from it. And you lose your premium amount also.  But if Nifty price decreases and it reaches 5800 then…

In the derivative market two types of options are available, the call options and the put options. Call options are contracts which enable you to buy at a specific price in future. Similarly put options are those contracts which enable you to sell at a fixed price in the future. First we can discuss about how call option work in derivative market. Call option In call option, you can buy a certain amount of shares or an index, at a predetermined price, on or before the expiry date. This predetermined price is also known as the strike price or exercise price. Expiry date is the date before which you can handle your position. For availing this facility, you have to pay a minimum amount to the seller/writer of the option in the exchange. This is necessary for minimizing loss of a seller/writer. This is essential because the writer of the call option may loss if the market price is rise beyond the strike price before the expiry. And the seller is forced to sell you shares at strike price even if it is loss. The premium payable amount is also driven by the market. Following are the main features of call option. Specifics: For buying a call option you must place a buy order with your broker specifying the predetermined price and the expiry date. Also specify the amount that you are ready to pay. Fixed Price: Is also known as strike price or exercise price, the fixed amount at which you agree to buy the assets in the future. Option Premium: It is the premium amount you must paid first to the exchange, which then passes to the option seller. Margins: You can sell call option by an initial amount not with the entire sum. Also you have to maintain a…

  It is every traders dream to quit his job and make a living with trading from home. There will be no boss and will be lots of money and time. In your current job you may work for long hours. After this long time commitment and back home, it may left you totally drained.At that time think about take trading as a full time job. In today’s market trading is not a high barrier-to-entry field, one who has ambition and patience can trade and can take it for a living. Nowadays anyone can start trading with little to no money. Due to changes in technology and increasing volumes on the exchanges convert the high-barrier-entry field of trading into the low-barrier-entry field. There are two cases, requirement of a small amount of personal capital to get started the trading carrier and the other is no personal capital requirement. Anyone in the world can open trading at anytime because the market is so interlinked and any of these markets can be accessed with relative ease. Which implies even people with full-time jobs or children at home can trade with ease. It is only the matter of finding good market and different market opportunity. But we can’t completely say that trading is an easy business, it requires extreme care and preparation to stay in for long time. You can find different trading alternatives when you look for such alternatives in today’s market. But the matter of success will depends on you. You should capable of separating them such as which option can be used for a living and which one can be used for generating an additional income. For being a successful trader one needs to develop good trading rules. The combination of rules is more powerful than a single individual rule. The succeeding…

  In trading it is important to maintain stop loss and target efficiently because each one is important in its part. From word you can understand that it stops your loss. It is very important to have proper target prices and stop losses set before you purchase a share. Stop loss is a buy or sell order which gets triggered automatically, once the stock reaches a particular price. The focus here is to limit the loss on a secured position. Stop-loss is used to minimize the loss of a trader. Assume that you have bought a share at Rs 1000 and you have decided to accept only Rs 50 loss so place a stop loss at Rs 950, so when this price will reach your share will be sold in market. Suppose the price goes more down towards Rs 900 then you do not have to face more loss as your share is already being sold at Rs 950. For a Sell, the limit price must be less than or equal to the trigger price. If for a stop loss order to buy, the trigger price is 930 the limit price is 950 and the market price is 900, then this order will be released into the system once when the market price reaches or exceeds 930. Let’s analyze the another example, Suppose you have bought a share at Rs 10 and you have decided to accept only Rs 2 loss so place a stop loss at Rs 8, so when this price will come your share will be sold in market. Suppose the price goes more down towards Rs 8 then you do not have to face more lose as your share is already being sold at Rs 8. If you are wish to having your trading is in a right peak so you have to put the target price efficiently but all the time it is not…

  To get to grip with emotion is the hardest thing for a person new to trading. Also for a person who think himself to be a mentally strong person. When he started trading all these will change. So first learn how to control your emotions and try to keep them outside. Fear and greed are the two common emotions among the traders. All traders know that some days are not their days. And some other days market is not responding with traders need. And they face loss in those days. And if a trader stays too much in that single down day it will dip him in depression. Instead of reading too much about that day realizes that you are going in a wrong direction and adapt some other techniques. If you find a little bit of depreciation after your day trading. Forget it and if you can’t do that watch a comedy movie or listen some good songs it may get your mind out off the market. And just relax! A trader should act fast. Other thing is that they have to make big decisions within a very short amount of time. And there comes an emotion doubt. All which is new to trade cannot avoid this emotion. Market movement is very fast and we don’t have enough time to wait there. If you have many doubts and long time passed don’t do a trade. To avoid this study how can you make quick decisions by structured analysis. If your mind doesn’t think properly go and take a small cup of tea and get away some minutes. Now how you can control your emotions? It is also in your hand. Do some hard work before trading means find some time to learn about trading. Find good books and watch some…

PIP stands for (Price Interest Point). For calculating PIP value of selected currency pair, first need to know in which category your selected currency pair comes.  In FOREX trading there are two currencies included and its called Currency PAIRS.   These currency pair symbols are came from their three letter ISO symbols like USD, JPY, GBP, etc. FX Currency Pair contains two currencies. The first currency called "Base Currency " and second one called "Quote Currency". The value of  currency pair in FOREX Trading means the value of Base Currency in the Quoted Currency. For Example EUR/USD has value 1.11710 means 1 EUR = 1.11710 USD. Following are the three category you must know to calculate the PIP value of your selected currency pair. 1. Direct Rates In the currency pair, the Quote Currency (Second Currency) will be USD called Direct Rates. For example EUR/USD, GBPUSD, AUD/USD, etc. Following are the calculation for Currency Pairs in direct rates category. The formula for calculating PIP value in Direct Rates is, PIP = Lot Size x  Tick Size The standard size of a Lot is 100,000 and Tick Size means smallest possible change in Price. Below shows an example of calculating One PIP value for One Lot of EURUSD currency pair. 1 PIP = 100,000 (Lot Size) x 0.0001 (Tick Size) = 10USD. Example: 1 Lot of EUR/USD Buy @ 1.1175 and Sell @ 1.1180 Calculating Proft/Loss in direct rates is calculated as below, Profit/Loss = Sell Price -  Buy Price 1.1180 (Sell Price) - 1.1175 (Buy Price) = 0.0005  (P/L) = 5 PIPS Profit One PIP in One Lot of EURUSD = 10 USD So the above trading gives 5  PIP x 10 USD = 50USD Profit. 2. Inirect Rates In the currency pair, the Base Currency (First Currency) will be USD called Indirect…