How To Trade Blog: November 2020

Monday, November 30, 2020

How To Login And Basic Setups For The Metatrader 4 (MT4)

Part 1 has detailedly introduced to you how to download and install the MT4. Today’s article will continue to show you how to use, to login, as well as basic setups of MT4.

How to use the Metatrader 4 (MT4) on a desktop

How to login MT4

After starting the MT4, click on “File” in the left corner of the screen. Then, select “Login to Trade Account”.

Next, fill in the “Login”, “Password” and “Server” in the login screen the information received in the email when registering the account.

How to basically set up the Metatrader 4

Adjust the MT4 chart as follows:

Remove all charts that are currently displayed in standard mode at once

First, remove all the charts that are currently displayed in standard mode by clicking the X in the upper right corner of the chart.

After removing all charts, the MT4 screen becomes the one below.

Add a chart of the currency pair you intend to trade

Right-click on “Market Watch” in the left corner of the MT4 screen => Select “Show all”.

In this way, you can show all hidden currency pairs.

Click on the “+” icon in the upper left corner of the MT4 screen => then click to select a currency pair of your choice.

Add a chart of your favorite currency pair to the screen

Once selected, the chart of the currency pair you choose will appear on the screen.

Display the selected currency pair on the chart

You can add multiple charts of your favorite currency pairs by repeating the above operation. When adding multiple charts, the MT4 screen becomes the one below. From here, you can make adjustments to make the screen easier on the eyes.

Display multiple currency pairs on the chart

Sort displayed charts into rows

If you do not allocate, the charts will be stacked up on each other. Therefore, to arrange the chart in rows, click on the icon as shown below.

Change the display of MT4 charts to candlestick charts

There are 3 types of MT4 chart display: bar charts, candlestick charts, and line charts.

The candlestick chart will be displayed when you click on “candlestick chart” on the toolbar on the screen.

Change the time frame of charts

The time frame shows the candle time period.

For example, If the time frame is 15 minutes then each candlestick will represent the price movement for 15 minutes. Every 15 minutes, there will be a new candlestick.

You can display the chart with the desired time frame by clicking “M1 – MN” on the toolbar of the MT4 screen.

Time frames on the MT4 charts — Time frames on the charts

To conclude

This is the end of part 2 with the tutorial on how to use basic features and how to log in to MT4. It looks simple. However, if you are a beginner, you have to perform many times to master it.

See you all in the next article.

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Sunday, November 29, 2020

How To Download & Install The Metatrader 4 (MT4) Software On A Desktop

Metatrader 4 is an indispensable trading software for Forex market investors. Most brokers around the world use MetaTrader 4 to assist investors to trade in the fastest and most convenient way. In this article, we will learn how to download and install the Metatrader 4 (MT4) software for beginners.

What is MetaTrader 4?

Metatrader 4, commonly known as MT4, is an electronic trading software widely used for small-scale foreign currency transactions. MT4 was developed by MetaQuotes Software Corp – a Russian software company. It is being used by more than 500 brokers and banks globally.

Launched in 2005, the MT4 trading software has become very popular among Forex traders due to its easy-to-use features and automated trading support. It allows users to write trading code tables and trading robots, also known as automated indicators.

For most online traders and investors, today, MetaTrader 4 is a very popular name whether they trade forex or CFDs (contracts for difference on financial instruments)

Benefits of the MT4 software

MT4 is not only the most popular online trading platform used for global markets, but it is also considered as the most efficient software for forex trading, developed exclusively for individual online traders.

Online (electronic) trading software are programs written for use by computers. The purpose is to place orders for trading financial instruments through institutions (such as brokerage firms).

MT4 acts as intermediaries. That is, it allows for online transactions between buyers and sellers by matching their trading orders. Online investors can trade on the real-time market prices provided by the trading software.

At the same time, they can increase their potential profits by using some of the additional trading tools provided for these pieces of software. These are managing trading accounts, providing online information, charting tools. And there is even the use of trading robots, also known as automated indicators.

Development history of the MT4 software

Today, pieces of online trading software are used for a wide variety of financial instruments such as currencies, stocks, bonds, futures, and options. However, the early versions were mainly used for trading in the stock market.

Until the 1970s, people still did financial transactions between brokers and their counterparts. Traders could not access the global financial markets directly but through intermediaries.

It was also during this time that pieces of electronic trading software began to be applied to execute at least a portion of these transactions. Those pieces of software, at that time, were mainly used in the stock market. It was the RFQ systems (request for quotation). On that system, the client and the broker placed a trading order and waited for the validation which would take place after a period of time.

Starting in the 1970s, pieces of electronic trading software failed to provide real-time prices. So they gradually replaced them by pieces of more advanced software that could execute an order almost in an instant. In addition, real-time pricing and user interface are also improved.

Main features of MetaTrader 4

Enable EA, built-in and custom indicators.
One-touch transactions.
Full range of technical analysis tools with over 50 indicators and charting tools.
Process a large number of orders.
Set up custom indicators and different time periods.
Historical database management, historical data import/export.
Ensure adequate data storage and safety.
Internal email system.

How to download and install Metatrader 4 (MT4) on a desktop

Step 1: Access this link https://www.metatrader4.com/

Step 2: Select Metatrader 4 → Select Download for free.

Select “Download for free MT4” to download

Step 3: After clicking download MT4, the interface will appear as follows

The interface after selecting "Download for free” — The interface after selecting “Download for free”

Scroll down and select Download MetaTrader 4 for PC and create a demo account.

Step 4: After downloading MT4, you will have 1 mt4setup file. Click on it to install Metatrader 4.

Select the mt4setup file to install - Metatrader 4 MT4 — Select the mt4setup file to install

Step 5: Click Next.

Click “Next” to continue with the installation

Step 6: The interface will appear as shown. Leave the system to run on its own.

Step 7: Click Finish to complete the installation.

Click “Finish” to complete install mt4 — Click “Finish” to complete

Step 8: The interface appears as shown as the installation is complete.

Summary

This is the end of the article. Please follow the instructions to install MT4 on your computer. In the next article, I will show you how to log in and use MT4.

The post How To Download & Install The Metatrader 4 (MT4) Software On A Desktop appeared first on How To Trade Blog.

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Friday, November 27, 2020

Forex Orders You Need To Know To Trade & Make Money Efficiently

In the Forex market, there are many different types of orders that traders use to manage their trades. Among them, there are several common order types that all brokers accept.

In this article, we will learn about the main Forex trading orders and how to use them in the market.

What is a market order?

A market order is perhaps the most basic one. Often traders will learn this type of order first. As implied by the name, market orders are traded on the market. This means that if you want to enter the Forex market immediately, you can open a market order at the current price.

Usually, daily investors and traders rely on market orders to enter and exit the market quickly according to the strategy.

For example, The GBP/USD transaction table below shows the live prices for buying and selling. A market order to buy at 1.30125 will be executed immediately at the current price. The same applies to a sell order.

Types of pending orders in Forex trading

The next most popular type of FX order is a pending order. These types of orders help you to place pending orders away from the current market price. If the market price reaches the price you set earlier, pending orders are automatically opened on the market. There are many benefits to trading pending orders, including not having to sit in front of a computer to execute your trades!

Typically, pending orders in Forex can be used for breakout points or with other strategies that require execution when the price crosses a certain point.

Limit orders

Buy limit: pending buy orders below the current price.

For example, First, place a limit order to get a better price. If the XAU/USD is at 1911, but you think the price will drop to 1900 before going up, you will place a limit order to buy at 1900 aka a Buy limit order.

Sell limit: pending sell orders above the current price.

For example, If the XAU/USD is at 1911, but you think the price will rise up to 1920 before going down, you will place a limit order to sell at 1920 aka a Sell limit order.

Stop orders

Buy stop: pending buy orders above the current price.

For example, The XAU/USD is at 1911. You think that if the price rises above 1915, it will continue to rise sharply. So now, you place a pending order to buy at the price of 1915 aka a Buy stop order.

Sell stop: pending buy orders below the current price.

For example, The XAU/USD is at 1911. You think that if the price drops down to 1900, it will continue to plummet. Then, you will place a pending order to sell at the price of 1900 aka a Sell stop order.

Stop-loss and take-profit orders

You can set the Stop-loss and Take-profit orders for all buy/sell orders in the market.

Stop-loss orders

This is an order that automatically exits when the price reaches a certain level of loss that has been set before.

Setting a stop-loss helps you to manage the risk amount of each trade. As a result, you will avoid heavy losses to your account.

This is a very important order which is indispensable in trading

Take-profit orders

This is an order that automatically exits when the price reaches a certain level of profit that has been set before.

Setting a take-profit helps you to manage the percentage of money to earn and the amount to lose (stop-loss). From there, you may have a trading strategy to allocate the volume accordingly.

The last line

The meaning and usage of the order types in the market sound simple. However, you need a lot of practice to use it well. This is because of psychological pressure during trading which can cause you to confuse among orders.

Prepare yourself with the most solid knowledge and skills before starting to trade.

The post Forex Orders You Need To Know To Trade & Make Money Efficiently appeared first on How To Trade Blog.

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Wednesday, November 25, 2020

Terms You Must Know When Trading Forex (Part 2)

After part 1, today, we will continue to learn about common and must-known terms in Forex trading such as Bid, Ask, Spread, Equity, Margin, etc.

What are the terms “Bid”, “Ask”, “Spread” in Forex?

What is the Bid price?

The BID price is the price that the platform accepts to BUY from you, aka the price you will SELL to the market. That’s the best selling price at which you can sell.

In the quote, this price is the price that precedes.

For example, If the quote for GBP/USD is 1.2892/93, the BID price will be 1.2892. This means if you sell this currency pair, you will execute the order at 1.2892.

What is the Bid price? - Forex trading terms — What is the Bid price?

What is the Ask price?

The ASK price is the price that the platform accepts to SELL to you, aka the price you will BUY from the market. That’s the best buying price at which you can buy.

This price is the second one in the quote.

For example, If the quote for USD/JPY is 105.25/26, the ASK price will be 105.26. This means if you buy this currency pair, you will execute the order at 105.26.

What is the Ask price? - Forex trading terms — What is the Ask price?

What is Spread?

SPREAD is the difference between the BID and ASK.

SPREAD = ASK – BID

What is Spread? - Forex trading terms — What is Spread?

Some characteristics of SPREAD:

+ SPREAD is calculated by pips, decided by the platform and market.

+ The higher the SPREAD is, the more disadvantage the investor will suffer. Platforms charge via the SPREAD.

+ To attract investors, some platforms will adjust the SPREAD very low, or even to 0. At this time, platforms will collect fees from the Commission (commission per trading order).

Therefore, you need to be alert to choose a reputable platform with a low spread and commission.

What are Balance, Equity, Margin, Free Margin, Margin level terms in Forex?

Balance

Balance is the initial balance in your account. Or it can be simply understood that this is the CASH amount in your account.

For example, If you deposit $1000 into a new account, your balance will be $1000. If you open a new order, your balance will not be affected until the order is CLOSED.

Your balance will only change in the 3 following ways:

When you deposit money into your account.
The time when you close an order.
When you hold the order overnight. At this time, you will normally receive/pay the swap.

Since we have just mentioned swaps, what is the “swap”?

Swap is the fee you will receive or pay at the end of the day if you keep a transaction overnight.

If you get a swap, then that amount will be added to your balance.

If you have to pay a swap, that amount will be deducted from your balance.

Whether you do not open high-volume orders, these swaps are usually not much but can increase over time.

What is Balance? - Forex trading terms — What is Balance?

Equity

The term “Equity” represents the current value of your trading account and the fluctuations in your Forex account. It is the total account balance and all profits/losses from open orders.

When your current transactions increase or decrease in value, it is your equity.

Equity calculations:

+ If you don’t open any orders then Equity = Balance.

+ If you are opening an order:

Equity = Balance + Profit / Loss of orders.

For example, Your balance is 1000 USD. The total profit of your open orders is 50 USD.

Then, Equity = 1000 + 50 = 1050 USD.

What is Equity? - Forex trading terms — What is Equity?

Margin

Margin is collateral money.

When trading Forex, you only need to place a small amount of capital to open and maintain new orders. This capital is considered margin. Margin can be viewed as collateral or deposit that you need to have to open a position or keep it open.

The amount of margin depends on the leverage you use.

For example, If you buy 1 lot of GBP/USD and use the 1:500 leverage, then you must have a margin of 100,000/500 = 200 USD.

Remember that margin can be a double-edged sword because it helps to make big profits while, at the same time, it can create big losses. This is because the order is based on the full value of the transaction, not just the amount needed to open it.

Free Margin

Free Margin is the amount of money in a trading account that has not been used as collateral. This amount can be used to execute any transaction such as withdrawals or opening new orders.

Formula for calculation: Free Margin = Equity – Margin.

Margin level

Margin level nghĩa là mức ký quỹ. It is the percentage (%) based on the amount of equity compared to the amount of the margin used. The lower the margin level is, the less unused margin will be. This could lead to something very bad like a Margin call or a Stop out.

The formula for calculating Margin level:

Margin level = (Equity/Margin) x 100% = Percentage (%)

For example, Your account has equity of 10,000 USD. You place a position with a margin of 2500 USD.

Now, Margin level = (10,000/2500) x 100 = 400%

Paying attention to the margin level is of utmost importance. It allows traders to see if there is enough money in the account to open new trading positions.

In conclusion

We have covered the most common and necessary terms in Forex trading.

In the next article, I will introduce and explain to you the types of Forex orders and how to use them.

Wishing everyone a good and successful transaction.

The post Terms You Must Know When Trading Forex (Part 2) appeared first on How To Trade Blog.

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Tuesday, November 24, 2020

Terms You Must Know When Trading Forex (Part 1)

All traders who start to learn about Forex will surely hear the terms such as pip, lot, leverage, etc.

So what are these Forex terms? Are they important? How do they affect the trading process?

This article will answer all of those questions.

What are the terms “Pip” and “Pipette” in Forex?

What is Pip?

A pip is a measure of the movement in value between two currencies.

For example, When GBP/USD increases from 1.2941 to 1.2942, a rise of 0.0001 is called 1 pip.

For different currency pairs, the value of 1 pip can vary. Such as:

+ For currency pairs that do not include JPY (EUR/USD, GBP/USD, etc.), 1 pip is located at the fourth decimal digit in the rate.

For example, when the GBP/USD rate is 1.3002, the number “2” will represent the pip.

+ Regarding currency pairs that include JPY (USD/JPY, EUR/JPY, etc.), 1 pip is located at the second decimal digit in the rate.

For example, when the USD/JPY rate is 105.27, the number “7” will represent the pip.

What is Pipette?

There are platforms that quote currency pairs other than the standard “the 4th or the 2nd”. They take “the 5th or the 3rd” digit after the decimal point. It means that these brokers also quote odd pips. And this odd pip is called a pipette.

For example, When the GBP/USD rate increases from 1.29815 to 1.29816, the rise of 0.00001 is called 1 pipette.

What is Pipette? - Forex terms — What is Pipette?

What is Lot? How to calculate the value of 1 pip per 1 unit of a currency pair

What is Lot?

Forex transactions are executed via a unit called “lot”. 1 standard lot is equal to 100,000 base currency units.

For example,

+ Buying 1 lot of GBP/USD means buying 100,000 GBP and selling 100,000 USD.

+ Selling 0.5 lot of USD/JPY means selling 50,000 USD and receiving 50,000 JPY.

What is Lot? - Forex terms — What is Lot?

How to calculate the value of 1 pip per 1 unit of a currency pair

Example 1: EUR/USD = 1.1131 => 1 EUR = 1.1131 USD.

If you buy 1 EUR, when the price goes up by 1 pip (1.1132), you will make a profit of 0.0001 USD.

Therefore, if you buy 1 lot (100,000 EUR) => Gain 0.0001 x 100,000 = 10 USD per 1 pip.

Example 2: USD/JPY = 108.50.

If you buy 1 USD, when the price goes up by 1 pip (108.51), you will make a profit of 0.01 JPY = 0.01/108.50 = 0.000092 USD.

Therefore, if you buy 1 lot (100,000 USD) => Gain 0.000092 x 100,000 = 9.92 USD per 1 pip.

The Pip alone only shows the change in the currency pair rate.

It is only valid when accompanied by the number of units for the currency pair you are trading.

How to calculate profits in Forex

Profit / Loss = Unit of volume x 100,000 x the changed decimal part.

Example 1: Buy 0.5 lot of GBP/USD at 1.3002 => Sell at 1.3022. Price rising by 20 pip is equivalent to a move of 0.0020 USD.

Profit = 0.5 x 100,000 x 0.0020 = 100 USD.

Example 2: Buy 0.2 lot of EUR/JPY at 120.25 => Sell at 120.40. Price rising by 15 pip is equivalent to a move of 0.15 JPY.

Profit = 0.2 x 100,000 x 0.15 = 3000 JPY = 3000/108.69 (USD/JPY rate) = 27.6 USD.

What is Leverage? Why do we need to use leverage?

What is Leverage?

Leverage is a loan which the platform offers you. It allows you to execute a transaction with a value many times greater than your trading account. The aim is to gain significant profits from small price movements.

Why do we need to use leverage?

Thanks to leverage, you can trade BIG with A SMALL CAPITAL.

In Forex, the platform will allow you to use many different leverage levels, which can be 1:100, 1:200, 1:500, etc. These levels have different values depending on the regulation of each platform.

So what are 1: 100, 1: 200, 1: 500, etc.?

For example, If you want to place a buy order of 1 lot of GBP/USD, your account balance must have enough 100,000 USD for margin to open the order. However, when you use the 1:1000 leverage, the amount you need to deposit is only 100,000/1000 = 100 USD.

It can be said that leverage is a double-edged sword in Forex. It can help your account grow quickly. On the contrary, it also burns your account instantly if you do not have an effective method of trading and capital management.

In conclusion

In Part 1, there are just a few of the many terms that you need to know when participating in Forex.

Hopefully, the article has provided you with useful information.

Leverage is a powerful “weapon” if you know how to use it. Choose for yourself an effective trading strategy so that your account can grow steadily and stably.

To be continued…

The post Terms You Must Know When Trading Forex (Part 1) appeared first on How To Trade Blog.

source https://howtotradeblog.com/forex-trading-terms-part-1/

Saturday, November 21, 2020

How Do Forex Market Sessions Work?

As shared in the previous article, the Forex trading market will be active 24 hours a day. However, the market’s amplitude is not the same for every session of the day.

There are times when the market will move in extremely large amplitudes (increase or decrease a lot). However, there are times when the market almost moves “sleepily”.

So why?

To understand the reasons as well as be able to choose the appropriate trading time, we will learn through today’s article.

Market time frames

The Forex market operates 24 hours a day and is divided into different trading sessions. In which, there are 4 main sessions including Sydney, Tokyo, London, and New York. The opening and closing hours of these sessions differ between winter and summer. Below is a detailed picture.

Summer:

REGION	EST
Opening time of the Sydney session Closing time of the Sydney session	8:00 PM 12:00 AM
Opening time of the Tokyo session Closing time of the Tokyo session	7:00 PM 4:00 AM
Opening time of the London session Closing time of the London session	2:00 AM 11:00 AM
Opening time of the New York session Closing time of the New York session	7:00 AM 4:00 PM

Winter:

REGION	EST
Opening time of the Sydney session Closing time of the Sydney session	7:00 PM 11:00 AM
Opening time of the Tokyo session Closing time of the Tokyo session	7:00 PM 4:00 AM
Opening time of the London session Closing time of the London session	3:00 AM 12:00 AM
Opening time of the New York session Closing time of the New York session	8:00 AM 5:00 PM

The excitement in every session

Asian session

The Tokyo session is sometimes referred to as the Asian session because of the highest number of transactions usually performed here. However, the transaction volume is still quite small.

Japan is the third-largest foreign exchange market in the world. Therefore, it is not surprising that the Yen is the 3rd most traded currency.

Some characteristics that you should know about the Tokyo session:

+ Liquidity is sometimes very poor. Trading in this session, sometimes you have to wait a long time before getting results.

+ Usually, you will see strong movements within Asian currency pairs such as AUD/USD, NZD/USD, or USD/JPY.

+ Most trading happens at the beginning of the session when the economic news is released.

London session

London is the largest and most important trading center in the world. Most of the major commercial banks are located in London. The reason is for the high liquidity and efficiency of the market. The large number of investors participating and the large volume of transactions make the London session the most volatile one among all trading sessions.

Some characteristics to know about the London session:

+ High liquidity and lower transaction fees, e.g lower spreads.

Most price trends start in the London session. They will last until the start of the New York session.

+ Because of the large volume of transactions and high liquidity during the European session, we can trade most currency pairs. However, it is best to trade the main pairs (EUR/USD, GBP/USD, USD/JPY, USD/CHF) whose spreads are usually the lowest.

New York session

New York is the second-largest market, accounting for more than 19% of the total Forex market revenue.

Some information to know about the New York session:

+ The time that coincides with the European session is when the market is active and with high liquidity.

+ Most economic reports are released during the opening of the New York session. Please note that 85% of transactions involve the USD. Therefore, whenever economic news is released during the New York session, the market is capable of strong volatility.

The amplitude of fluctuations of major currency pairs in each trading session

Amplitude of fluctuations of currency pairs

We can see that the market moves most strongly during the London session.

Overlapping of sessions

A good liquid Forex market means more and more people enter the market.

Therefore, the time when the sessions overlap is when the liquidity is highest.

Let’s learn about the overlap of sessions.

Joint session of Tokyo and London

Liquidity will usually be quite poor during this period. It is for a number of reasons as follows:

+ Normally, there are not many fluctuations in the Asian session. Therefore, when entering the end of the session, there is almost no change.

+ For European traders, this is just the start of the day. Therefore, they limit transactions when the market lacks liquidity.

This creates an ideal period for you to relax while waiting for trading opportunities in the joint session of London and New York.

Overlapping of the Tokyo and London sessions

Joint session of London and New York

The “fun party” has just started now. This is the busiest time when transactions are executed constantly. The market will move within an extremely large amplitude. It is especially when news, financial reports, etc. from the US and Canada are released. The market may also be affected by “late” news from Europe.

Most trends begin during the European session and will continue until the end of the New York session. However, it is still possible that the trend will reverse at the end of the European session when traders decide to take profits.

Overlapping of the London and New York sessions

In one word

The Forex market operates continuously 24/5. However, you can’t sit in front of a computer screen all day. Hopefully, this article will help you choose the right time for your trading strategy.

You should join Forex as an investor, not a gambler. Make yourself the wisest trader. I wish you successful transactions.

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