Thread: New to currency trading???

Johns,

Not to confuse you further, but one important point to remember with currencies are that there are very strong correlations (both positive and negative ) between some pairings. For instance, EUR/USD has a very strong NEG. Correlation to USD/CHF. Why that matters is it can be very easy to double your position one way or the other without realizing it. Or cancelling out some profit. As an instance, if you were EUR/USD and long USD/CHF you would essentialy be treading water because any gain in eur will be offset with a loss in swiss. (Not quite pip for pip as swiss includes a marginally smaller pip value) If you are long cable and euro in precisely the exact same time you've doubled you position since they proceed with a solid POS correlation. This is great when things are moving your way but can be disasterous when they aren't. Before you decide what pairings to trade get to know the correlations.

Originally Posted by ;

Johns,

Not to confuse you further, but one important point to remember with currencies are that there are quite strong correlations (both positive and negative ) between some pairings. For instance, EUR/USD has a very strong NEG. Correlation to USD/CHF. Why that matters is that it can be quite easy to double check your position one way or another without recognizing it. Or cancelling out any profit. For instance, if you were long EUR/USD and long USD/CHF you would essentialy be treading water as any profit in eur will be counter with a reduction in swiss. (Not very pip to get pip as swiss includes a marginally smaller pip value) If you are long cable and euro at the same time you have doubled you position because they move with a solid POS correlation. This is great if things are moving your way but can be disasterous if they aren't. Before you decide what pairings to trade get to know the correlations.

The attached is a zipped XL sheet of MY Opinion of Mirrors Pairs that travel in Opposite Directions an Matches Pairs that travel at Precisely the Same Management .

It may seem a little confusing at first, but is Forex.

HTH.
https://forexintuitive.com/attachmen...1851427433.zip

Hi johns. . .you're fairly near...I have a similar background to you....

Whatever transaction you make, you are essentially trading with the first currency and the opposite with the second (they have names, but I forgot what they are). If you are buying one currency, you have to market another....for example, if you buy EUR/USD, you are bullish on the euro (as you are buying EUR and selling USD).

For example, lets say that you own a EUR/USD quote of 1.2036-39. You would buy at 1.2039 (ask) and market at 1.2036 (bid).

If you were to buy, you would be LONG EUR and SHORT USD. Lets say you buy 10,000 EUR worth. . .you'd be long a static amount of EUR and your USD currency would flucuate based on your own 10,000 EUR position.

Hope this made some sense!

If you have any other questions feel free to pm me...I was a n00b here not long past.