Calculating Interest on forex trade

One ofthe best things about Forex trading is the fact that one can trade using leverage, thus
borrowing as much as 1,000 times your capital in order to make a trade. However, borrowing
money for trading in foreign exchange is the same as borrowing it for other purposes—interest
must be paid on the loan.
However, as currency trading involves both buying and selling, the interest due on your loan can
be offset by the interest earned on the currency you buy. Before going on to particular examples,
let us take a look at interest rates in general, to see how the foreign exchange market is affected
by it.
In central banks, interest rates are set in accordance with a country’s monetary poIicy—high
interest rates make the currency more expensive to buy and lower interest rates make it less so.
imagining the government ofa country with high inflation will help you understand how interest
rates are used.
The government, because of rapidly rising prices, might decide to raise interest rates. This would
increase the cost ofthe country’s currency, and make demand and consumption fall, as
borrowing would be more expensive.
This in turn would cause prices to fall and inflation rates would come down. Similarly, a country
undergoing recession might lower interest rates to boost the country’s economy, as lower price of
currency would cause demand, and, therefore, supply, to increase.
Interest rates set by central banks also determine at what rate commercial banks can borrow from
governments and lend to their customers, including forex traders. Which tells us how interest
rates affect this trade.
A trader who, for example buys GBP/USD, needs to borrow the Dollars to buy the Pounds and
will, thus, pay interest on the USD and earn it on the GBP. If the interest rate the Bank of England
sets for the UK Pound is higher than the one set by the Federal Reserve for the US Dollar, the
trader will earn more on the UK Pounds he bought than he pays on the US Dollars he borrowed,
thus making a profit.

Forex Trading Strategy

Forex system happens to be the greatest global trade. It taps into some movements for
businessmen to gain well. One accepted Forex business agenda utilized rather gainfully in the
business is called Channel Breakout.
Forex Trading Channels - Channels consist of paths made on a schedule to trace the array
where exchange had been transacted in a time span. They can be simply constructed. Observe
the schedule in a time span and draw lines linking the comparatively tall spot business expenses,
and down under linking a comparative low spot business expenses. This will give you a picture of
the business array existent during a time span like, six months.
Channel Breakout- Once the value of exchange goes up the peak network line, there is a rising
network getaway. Also, once the value goes down below the lowest network spot, you get a
downward network getaway. Network getaways happen upwards and downwards. With enough
Forex input with scientific scrutiny, everyone may utilize the process for getting a gainful
exchange business agenda.
You have to build the channels very carefully. Every meeting of lines doesn’t indicate a proper
getaway. If there is any fallacy in the line construction, what you observe is business out ofthe
array, which just leads you back inside. Therefore, before anything else, gain enough knowledge
on Forex.
Gainful Control of Forex channels — When you figure out the working of networks, gains will
happen. Construct the business with enough pauses. Then, in case of an incorrect getaway sign,
you will get tolerable losses or if luck favors you, a very low profit.
But if you are on the correct side of a proper network getaway, the tiny lack you received will be
moved away and you get a good big satisfactory gain.
Any proper Forex business shareholder worth his name capitalizes on channel breakouts. In case
you want to cash in the exchange markets, take out a certain amount of time for a Forex
education to build this agenda and various technological scrutiny processes.

Forex Trading Tools

There is no one single super smart Forex trading tool which gives you profit, profit and more
profit. The only possible solution is to use a combination of different tools to identify the favorable
market forces to get a maximum number of high probability trades over a period of time.
Trendlines are the most popular and reliable Forex trading tool which many successful traders
give their testimonial for.

Importance of Forex trading

Foreign Exchange [Forex] involves exchanging of different foreign currencies for a profit. The
reason for buying the currency of another country may be the need to buy some commodity of the
said country as well, besides making money through the difference in exchange rates.
In the latter case, people buy currency of a foreign country when the rate in the market is low, and
sell it off when the rates go up. Currency trading is usually done between the central banks, the
government, speculators and MNCs. Nations cannot trade with each other without the presence
of a foreign market.
A huge amount of money is daily traded in the Forex market, though the amount invested by an
individual trader may be very low. No one individually can have any influence on the Forex
fluctuations, not even the government. So it can easily be concluded that the level ofthe currency
reflects the strength or the weakness of the economy of a country. So this makes the Forex
market a good place for competition.
The government and the central bank do try to stabilize the currency of their country by
speculating, by buying and selling currencies at appropriate times. So they can influence the
market if they conduct a trade in huge volumes, though. To buy its own currency, however, the
government or the central bank must have huge reserves of foreign currency with them. So it is
virtually impossible to inflate the currency value artificially.
Banks trade a lot in foreign currencies and this forms a chunk of the volume in the Forex market.
They buy currencies not only as individual bodies, but also on behalf of their clients. They trade in
lots of futures. Till a few years back, the brokers could influence the volumes of trading in the
Forex market. But due to the electronic services available now, the services of brokers is not
required. It’s easy to operate electronically.
Trading with international countries is possible only with the existence of Forex markets. When
there is no Forex market, there is no common currency between two countries, so one cannot
evaluate the value of one currency with respect to the other.
The buyer pays the seller in the former’s currency. With the money so received, the seller buys
goods inthe buyer’s country and sells those goods in his [seller] country.

What is Forex Trading?

Forex trading involves dealing in international currencies. Here, one can sell currency of one
country to buy that of another. The trader deals in Foreign Exchange [Forex] at the most
appropriate time to profit from the transaction. Good ability to forecast plays a vital role here. One
may wonder how Forex trading can be such a lucrative earning opportunity since fluctuations in
exchange is so little.
But remember, when done in big volumes, a minor change can mean a lot. There are many non-
monetary advantages to it as well. Anyone who wants to deal in Forex can do so, since only the
basic knowledge is required for it.
Forex can help you earn a lot of money. But there are certain conditions to follow before trading in
Forex. Firstly, one must have a thorough knowledge about the trends in the stock market, the
basics of trading and risk-taking ability. You will get all the help you need for attaining these
conditions very easily.
There are many sites on the internet which can help you clarify your basics and help you brave
rough weather. A good reason why Forex trading can be considered is the fact that there are
frequent fluctuations in currencies, though in percentage terms it may be small.
You gain if the fluctuation favors you and the reverse holds true as well. No one can accurately
predict the trend ofthe currencies. Liquidity is another reason why Forex trading is so popular.
Now the most important part — in Forex, you can make huge sums of money even if your initial
investment is on a lower side. You can invest as little as $50,000. Rich people have no upper cap
to the amount of investment. S0 remember that even with a nominal investment, the earning
ability is undoubtedly very huge.
Most ofthe great businesses are connected to the world of internet today, and Forex trading is no
exception. You can deal in foreign currencies right from your home. Infact, it is fully conducted
online. You have the liberty to choose when you want to trade, and you don’t need to meet any
deadlines.
Basically, you can be your own boss. The process of online trading is fairly simple for anyone to
understand. You just need to open an account for Forex trading with a recognized broker

Your forex profits will increase.

because you will have an edge.

because the strategies reduce fear and indecision.

because you will be able to spot entry setups and end of moves before the crowd does. Avoid chasing the market so you don’t enter a trade too late and get “burnt”.

because you will be able to “read’ the market better.

because the strategies can be implemented without buying any costly software or subscribing to expensive data services.

because you will exit successful trades before your profit evaporates.

because you will know when to let your profits run.

because you will learn how to use higher time frames to gauge how price will react on lower time frame charts.

Stop searching for the holy grail forex system, it does not exist./font

One of the most frustrating modes to be in is searching for years for a trading method that grows your trading account balance. You’ll find some people trying con you all over the internet. We are here to tell you its all rubbish. If you're going to change things, then the time to get moving is now. Learn skills, learn methods, learn entry setups with a proven edge in the market. We have discovered a proven way to siphon pips out of the forex market, but you still have to use my head, its not perfect, and it's automatic.. nothing is.
A forex trading method with a good winning percentage will be rewarding psychologically, keeps your morale high and is enjoyable to trade. A string of profits will build your confidence. See our trade of the week page which is updated at the end of each trading week. If you are looking for a forex system with no losing trades, forget trading and find another business or hobby. My priority is to keep losses small and wins should be larger than losses.

HOW TO BECOME A confident forex trader using this forex system.

You need to learn new strategies and systems in order to further your education and trading knowledge. You now have the ability to learn how to trade from a full time forex trader and start to identify high profitability trading setups.
You will realised a dramatic change in your trading approach. By trading price action only, you will join the group that make money consistently. If you’re a beginner and don’t know where to start, try these strategies first because they will save your ass big time!
Maybe you’ve bought forex trading systems or learned strategies or method before and your trading results still weren’t up to scratch. We have the solution you need. We want to teach you simple forex entry setups that are easy to identify, because we really believe trading should be kept simple.
The best forex trading methods are not 100% mechanical. We dont believe in b.s mechanical robots and the like. There is some decision making involved with these forex strategies. Once things for sure, you can count on these tested trading systems to select the right entries and exits. With repetition comes mastery. You will be able to see patterns and formations over time.

" Forex Trading Strategies and Forex Trading Systems Delivering Profits Week After Week"

 Forex trading strategies and Forex systems on 4 hour and daily charts, or if your time is really limited, you can trade just the Daily charts. Learn this simple strategy which is desgined to scalp for a quick 100 pips or leave the trade on for hours or even overnight to make 200 or more pips.
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This comprehensive trading ebook is designed to train forex traders to read price action and trade the forex market like real professionals.Does your trading system lose money? Its time for a huge change in your trading!. Join the group that make money consistently. If you’re a beginner and don’t know where to start, try thee daily forex trading strategies first. Stop looking for perfect mechanical forex system, and learn to read raw price action.
Maybe you’ve bought a forex system or used a trading strategy before and your trading results still weren’t up to scratch, most likely because they where useless curve fitted systems that have no use in real world trading. The con artists all over the internet never tell you the truth, back tested results are useless!.

It's time to learn a real forex tading method based on pure price patterns which is simple and effective. ...
This ebook is filled with solid forex strategies, similar to those used by banks and financial institutions. It's going to teach you powerfull trading setups, which we have used to profit considerably and consistently. We dont teach a bogus one hit wonder forex system, We are talking about you going away from this ebook with a concrete plan of action , powerfull forex system in hand, ready to make serious money. You will have unlikley seen these trading strategies taught anywhere.

examples of some of the most recent trades:

Here are examples of some of the most recent trades: Example 1: GBP/USD Day Trading Strategy Example 2: EUR/USD Day Trading Strategy Example 3: USD/CAD Short Term Trading Strategy Example 4: GBP/USD Short Term Trading Strategy

But there is something else -- our forex strategy is consistent. It always works.

results recently achieved by using forex strategy"

"Here are the results recently achieved by using forex strategy"

Symbol	Type	Open Time	Price	Close Time	Price	Pips
GBPUSD	BUY	05/01/09 04:30	1.4821	05/01/09 08:35	1.4883	+62
EURUSD	BUY	05/03/09 20:30	1.3300	05/04/09 23:25	1.3375	+75
EURUSD	BUY	05/05/09 08:00	1.3403	05/05/09 10:15	1.3365	-38
USDCAD	SELL	05/06/09 12:00	1.1730	05/07/09 10:00	1.1694	+36
EURUSD	BUY	05/08/09 00:45	1.3389	05/10/09 21:15	1.3622	+233
GBPUSD	BUY	05/12/09 03:10	1.5154	05/12/09 06:30	1.5263	+109
EURUSD	BUY	05/15/09 09:20	1.3564	05/15/09 13:00	1.3527	-37
USDCAD	SELL	05/18/09 01:45	1.1762	05/18/09 13:40	1.1665	+97
EURUSD	BUY	05/19/09 13:20	1.3627	05/20/09 15:25	1.3789	+162
USDCAD	SELL	05/21/09 11:45	1.1439	05/24/09 21:55	1.1234	+205
EURUSD	BUY	05/25/09 08:10	1.4009	05/25/09 21:30	1.3959	-50
GBPUSD	BUY	05/26/09 07:05	1.5817	05/26/09 16:35	1.5922	+105
EURUSD	BUY	05/29/09 05:05	1.4032	06/01/09 11:00	1.4152	+120
GBPUSD	BUY	06/04/09 02:35	1.6305	06/04/09 06:05	1.6373	+68
GBPUSD	BUY	06/07/09 20:35	1.5972	06/07/09 23:10	1.5927	-45
USDCAD	SELL	06/08/09 08:25	1.1203	06/08/09 22:50	1.1181	+22
GBPUSD	BUY	06/09/09 01:55	1.6063	06/09/09 16:10	1.6317	+254
USDCAD	SELL	06/10/09 15:35	1.1098	06/11/09 15:35	1.1001	+97
EURUSD	BUY	12/06/09 13:15	1.4033	06/12/09 14:15	1.4003	-30
GBPUSD	SELL	06/15/09 10:35	1.6318	06/15/09 14:00	1.6287	+31
EURUSD	SELL	06/16/09 12:30	1.3869	06/16/09 21:55	1.3841	+28
USDCAD	BUY	06/17/09 17:20	1.1318	06/18/09 03:10	1.1268	-50
GBPUSD	SELL	06/18/09 04:05	1.6372	06/18/09 08:50	1.6270	+102
GBPUSD	SELL	06/19/09 15:50	1.6494	06/22/09 05:05	1.6465	+29
USDCAD	BUY	06/23/09 10:15	1.1509	06/23/09 13:05	1.1482	-27
GBPUSD	SELL	06/25/09 01:50	1.6428	06/25/09 11:30	1.6313	+115
GBPUSD	SELL	06/26/09 10:15	1.6469	06/26/09 12:05	1.6516	-47
USDCAD	BUY	06/26/09 14:00	1.1519	06/29/09 06:05	1.1543	+24
GBPUSD	SELL	06/30/09 09:00	1.6537	06/30/09 19:25	1.6476	+61
EURUSD	SELL	07/01/09 18:10	1.4146	07/02/09 13:40	1.4017	+129
USDCAD	BUY	07/02/09 05:00	1.1505	07/03/09 00:25	1.1593	+88
Totals EURUSD		+592 pips
Totals GBPUSD		+844 pips
Totals USDCAD		+492 pips

To put it in layman's terms, a $5,000 start up capital combined with the power of leverage
grew to $15,327. And that is for the period of only two months!

forex strategy is efficient.

It has to be, of course. You don't want to have to attempt to understand the sophisticated, complex trading systems employed by the major corporate investors, with their teams of fully-resourced professionals using highly developed automated tracking networks and advanced mathematical formulas spread through several floors of their head office. Neither do you want to have to spend on an expensive, top-of-the-line computer stuffed with proprietary trading software.
Rather, you want a simple strategy which you can understand and quickly implement, and yet gets the same trading results as those coming out from the corporate office tower blocks. Our forex strategy delivers the results, yet is striking in its simplicity and elegance.
Next, our forex strategy is efficient.

"If you want to get to the top of the forex market “food chain” you have come to the right place."

In our quest to find the most profitable and at the same time for a "small" trader feasible forex trading system we have tested and analyzed many different forex trading strategies. The strategies that we have tested were ranging from simple combinations of TA indicators to more complex trading systems that were utilizing support/resistance levels, pivot points, chart patterns etc... However in order to reduce the number of systems that were later scrutinized more closely, we have developed our own system selection criteria. Basically the system that we were after had to have following properties: Simplicity, Efficiency and Consistency.
As we all know forex trading strategies are becoming more and more complex and sophisticated. What does it mean for our average independent forex trader? It means that our simplicity factor when developing a trading strategy gains in importance.

What usage could an average person make from a forex strategy that requires or presumes a profound knowledge in mathematics at a PhD level and a computing power beyond that of the newest personal home computer? A type of highly complex strategies commonly used by investment companies are neural networks. A neural network is, in short, a model of interconnected neurons (also known as nodes) that was inspired by the logical neurons in human nerve system. Like the human brain a neural network can acquire, store and utilize experiential knowledge in order to improve its performance day by day. Regrettably, to consistently use a forex strategy based on neural networks one requires the complex knowledge of how to feed a neural network with history data as well as excessively high computing power not affordable to our average forex trader.
Therefore we have set ourselves with a goal of finding a forex strategy that is comparable in its profit potential to the most complex professional trading system and at the same time is feasible and understandable to our average trader.

"How to leverage your capital in order to multiply your profits."

Many beginning traders don't fully understand the concept of leverage. Basically, if you have a start up trading capital of $5,000 and if you trade on a 1:50 margin you can effectively control a capital of $250,000. However, a two percent move against you and your trading capital is completely wiped out. If you are a beginning forex trader you should not use more than 1:20 margin until you get comfortable and profitable and then and only then you can attempt to use higher margins.
What does 1:20 margin mean? It means that with your $5,000 you will control a capital of $100,000. Let's say you are trading the currency pair EUR/USD and by using our entry strategy you have decided to enter the trade on a long side. That means that you are betting that USD will depreciate against Euro.

Let's say current EUR/USD rate is 1.455. Again, if your trading capital is $5,000 and you are using 1:20 leverage you will effectively be exchanging $100,000 to Euros. If the current rate is 1.455 you will receive 100,000/1.455 = 68,728 Euros.
If the trade goes in your direction margin will work in your favor and 1% decline in USD will mean 20% increase in your start up trading capital. So if EUR/USD rate moves from 1.455 to 1.469 you will be able to exchange your 68,728 Euros back to $101,000 for a profit of $1,000. Since your start up trading capital was $5,000 it is effectively a 20% increase in your account. However, if the trade went against you and USD appreciated 1% vs. Euro your account would be reduced to $4,000.

Do winning forex traders have some special talent?

So what's their secret? Do winning forex traders have some special talent? Have they found some inside knowledge and locked the rest of us out? Do they have a knack of thinking "positive" or thinking "winning"? Are their computer more powerful and their trading software more sophisticated?
What is it?
Well...It's none of the above!
Let's have a look at the figure below.


The typical beginner trader moves with the "herd". He sees a rally, doesn't want to be left out, and enters the market at point A. However, by then, winning traders, who were in earlier, start to cash in on their profits and the rally loses steam. So the beginner's position falls. His money is dissolving before his eyes! Either he panics and gets out at point B, when he can't bear the pain any more. Or, if he somehow manages to stay in long enough to see the next rally, he leaves at point C, relieved to recover at least some of his losses. This is exactly the kind of "herd" trader that successful traders prey upon.
But actually the beginner also lost at point C. Because during that exact same move the winning traders had leveraged their trading capital, entered and exited at the optimum times, and stuffed their accounts with profits!
If you want to learn how to enter and leave like the winners do, you should keep reading.