Currency Futures Trading
1. Title Slide 2. Hello traders, this is Roger Scott from market geeks with another video tutorial for you today. Before I begin I want to remind you to subscribe to our video channel and donâ€™t forget to visit marketgeeks.com for your free trading report. 3. In today's tutorial I'm going to teach you about currency futures trading. If you ask most traders to guess what the biggest market in the world, they will usually guess it's the stock market, precious metal market or the bond market. What if I told you that the foreign currency market is larger than all of these markets put together? The latest estimates show that the foreign exchange market trades about 2 trillion dollars worth of currencies each 24 hour period last year. 4. Since 99.9% of traders do not take delivery of the actual currency and offset their sale or purchase before delivery takes place there is very little difference between the two methods of trading currencies. While there are small regulatory differences, commission differences and spread differences, the main characteristics of trading currencies remains the same. 5. Believe it or not the biggest reason why people stay away from futures contracts is because they have trouble determining how to calculate the correct values for price changes and fluctuations. Unlike stocks that are calculated using simple dollars and cents share prices, each futures contract has a different contract size and each tick value or minimum price fluctuation. Once the minimum tick value is understood traders can begin analyzing currency futures contracts the exact same way they analyze different stocks. Here are the tick values for each futures currency contract you need to know about. 6. Example: Bought Euro at 1.28840 and was liquidated at 1.2950. The difference between the two numbers would be 110 ticks which would be a simple calculation of multiplying $12.50 * 110 ticks = $1375.00 7. Example: Bought Aussie at .98670 and was liquidated at .98845. The difference between the two numbers would be 175 ticks which would be a simple calculation of multiplying $10.00 * 175 ticks = $1750.00 8. Example: Bought Pound at 1.5523 and was liquidated at 1.5723. The difference between the two numbers would be 200 ticks which would be a simple calculation of multiplying $6.25 * 200 ticks = $1250.00 9. Example: Bought Yen at .99050 and was liquidated at .99150. The difference between the two numbers would be 100 ticks which would be a simple calculation of multiplying $12.50 * 100 ticks = $1250.00
10. Example: say the Swiss Franc was entered long at 1.04430 and was liquidated at 1.0300. The difference would be 130 ticks which would be a simple calculation of multiplying $12.50 * 130 ticks = $1625.00 11. Currency futures contracts as well as FX contracts trade similarly to other stock and futures markets and most technical analysis methods work with currency markets exactly the same as with other stocks and commodity markets. There's only one exception and it's a big exception, currency contracts tend to trend substantially more than most stocks and commodity markets. Back testing results show that currency contracts trend about 55% of the time. Other markets such as stock indexes, precious metals and bonds only trend about 30% on the average. 12. The other major difference between the currency markets and most other financial markets is the opening and closing hours. Most financial markets have a set opening time and a set closing time. The currency markets never close and trade around the clock in order to provide valid exchange rates to banks around the world. 13. Since currencies trend substantially more than other financial markets, it would make sense to utilize trend following or momentum style indicators when analyzing the currency markets. Two indicators that work well with currency markets are Exponential Moving Averages and MACD Momentum Oscillator. 14. Tomorrow I will go through several examples showing you how to apply both indicators to currency futures trading and how to tweak the settings to make the indicators respond best. 15. Thanks for joining us for todayâ€™s tutorial. Donâ€™t forget to visit marketgeeks.com for your free trading report. Wishing you the best in your trading. http://www.marketgeeks.com/currency-futures-trading-learning-the-basics/ Download Swing Trading Video Pack Right Now
Published on Jul 15, 2013
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