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Thursday, September 23, 2010

Delving into Forex

After my first venture in XAU, I decided to allocate some free time towards delving into the Forex market. I am totally new at it, and my first task was to look for good information, preferably free on the internet.

I stumbled on this great site that offers lots of free education, tools and resources

Whenever you find a resource on the internet related to finances, and I mean blogs, forums, books, newsletters, websites etc, it is always a good idea to visit Investimonials. This website is full of useful reviews and I can see a good effort being made in order not to allow fake/paid reviews on it. So, make Investimonials your friend. Babypips is the first Forex related website in the ratings of investimonials, which is always good.

In babypips, they teach you the basics of currency trading in an entertaining way as if you were going through different degrees at school. I think it is a very good starting point. And as usual I decided to wet my feet and already put on a trade.

I am going long the US dollar against the Canadian dollar. Which means I think the USD is going up versus the Canadian dollar.

I am going to design a system for my self and will discuss it here. It is just for experimentation purposes, we'll see how it goes.

Without further ado, here is the chart. Looks like the usd is going up from support, the stochastics are angling up, looks like there is going to be a positive cross in the MACD and the RSI is above 50. I am long 100 000 usd by using a $1000 margin (thanks to the power of a 100:1 leverage (go to babypips and learn all these terms))

There is a stop loss at 1.02825 which would automatically kick me out of the trade with a $400 loss and at the same time I have a sell order at 1.045 which would get me out of the trade with a $1200 profit.

Have fun!

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