Channel Trading


Trading in forex can be a difficult at times and sometimes is a rock best left unturned. Channel trading with Jason Hope is a great example of this paradigm. Channel trading is what happens when a currency reaches a point of pause between the buyers and sellers of the pair. In this example the Pound vs the Dollar are used to show an what channel trading looks like.
Introduction to advanced Channel trading by Expert4x

Here, the GBPUSD is moving in about a 30-40 pip channel over a period of several hours. This doesn’t leave a lot of room to trade this pair. Riskier traders might try to get in at the top/bottom of one of the peaks or valleys and ride it down/up, but as with any channel trading the market soon moves up or down and if you have guessed the wrong direction you will be stopped out. In this example there are 4 valleys and peaks to trade off of and a perfect entry would have resulted in a nice 30+ pip profit. But the true risk lies in a change in the market. When channel trading comes to an end it usually is followed by a rapid moving direction as the currency pair settles on a new direction. You may or may not have guessed the right direction. And that is the lesson here, guessing is a game in Vegas played at slot machines, not something we want in Forex trading.

Brokers Fees

Understanding Broker Fees in Forex

Getting started in forex trading can be confusing. Many beginning are unsure of how to choose a broker, how to determine a specific broker’s fees, or what broker fees even are. Fortunately, after arming yourself with this information, you will be ready to choose a great broker and begin working toward success in the world of forex trading.


How Broker Fees Work:

A broker fee is how forex brokers make money. Brokers charge traders fees based on the spread. The spread is the difference between the bid price and the ask price, or the selling price, of a specific currency pair. For example, if a broker has the pair USD/JPY listed as 1.2545 – 1.2548, the spread would be three pips. A pip is the unit of measurement that is used to describe the spread and is equal to $0.001.

Additionally, if the pair USD/JPY is listed as 1.2545 – 1.2548, then you would be paying $1.2548 for every USD/JPY, but can only sell each pair for $1.2545. This leaves the broker with $0.003, or three pips, for every single USD/JPY pair that you sell.

It is also important to understand that different brokers offer their users different types of spreads, known as fixed spreads and variable spreads, which generally range anywhere from 1.5 to 5 pips. A fixed spread is a type spread that remains constant, regardless of how fast prices are changing or what currency pair you are trading.
Lesson 1 what is Forex and how does It work

A variable spread is a spread that will change according to the current volatility of the market. If prices are changing at a rapid pace, the spread will increase. A variable spread will also depend on the currency that you are trading. Generally, the GPY ( Pound vs. Yen)and the GBP ( Pound vs. Dollar)Â will have a higher spreads than other currencies.

The last way that brokers charge their traders is by collecting a commission off of the spread. This commission is usually a very low portion of the spread, commonly 20% or 30%. Once a trade has been completed, this type of broker will usually transfer the trade to a large investor. While this means very low cost trades for small investors, most brokers do not operate in this manner.

The most common type of broker are those that offer traders variable spreads. However, it is important to carefully consider each type of broker and review your options, before selecting a broker with which to trade forex.

Defining the Basics of Forex


For those who are unfamiliar with Forex (foreign exchange market), learning the basics can seem rather difficult at first. The fact is, however, Forex does not need to be confusing, so long as you outline some of the major key factors regarding what it is.

What is Forex?

Put simply, Forex is a global, decentralized financial market that is utilized to trade currencies, and is one of the largest trading markets in the world. In the foreign exchange market, currencies are traded against one another. While Forex is used by many people simply to trade one currency for another, others utilize it in similar ways to stocks, attempting to predict movements in exchange rates and to trade accordingly. Even a small fluctuation in currency rates can be enough for one to make a good deal of profit from trading.


Going Long or Short, Pips

Like any market, Forex users have their own terminology. “Going long” or “going short” refer to two different methods of currency trading. Someone who is “going long” will purchase a currency pair in hopes that its price will rise so that it can be sold later at a higher value. “Going short” refers to selling a currency because it is expected to fall, only to go back later to purchase it when it has reached a lower price. Understanding these techniques is a crucial part to trading on the Forex market. Continuing with lingo, a “pip” is terminology for a chance in one point in the price of a given currency. Pips can be used for leverage in trading, and those hold a good deal of value for anyone who trades on a regular basis.

What is Forex? –

Brokers and Commissions

Just like with the stock market, brokers can be used when trading via Forex in order to guide decisions regarding which currencies should be traded, and in what scenarios. The downside to using a broker is that it is necessary to pay them a commission. In the end, however, brokers can make the Forex trading process far more streamlined, and can protect someone who is not well-versed in Forex from making a costly mistake.