Forex: An Introduction

introduction to forex tradingThe Forex is a global market where corporations, banks, public and private investors can purchase/sell their various currencies. The rules are not the same as those of the stock exchange. The latter has a fixed schedule for shutting and opening, while the money market is open twenty-four hours a day. In forex, trades start on Monday at 00:00 Greenwich Mean Time, and ending on Friday at 10:00 p.m. Greenwich Mean Time. That is not impossible because there are constantly open marketplaces all over the world, also it is unnecessary the dealers are present on your website where exchanges occur. Actually , the monies may be changed electronically. The primary money markets are China, Sydney, Tokyo, New Zealand, Frankfurt, London and New York.

The Forex is the biggest market on earth in quantity of trades. For the banks, commerce in monies was allowed only previously. Lately, the marketplace was started thanks to the Internet as well as computers to modest investors.
There exists a big electronic network which allows central banks to talk about their quotes. It’s known as the Interbank. The most often traded currencies would be the U.S. dollar, the Japanese yen, the euro, the British pound, the Swiss franc, the Canadian dollar and the Australian dollar.

You buy one money and, in once when you make trades in forex, you sell another. Currencies are always traded in pairs. For instance, pound sterling and U.S. dollar or U.S. dollar and Canadian dollar. The primary rule is this: you create a trade when you anticipate that its cost raises compared to that you will be selling. In the event the importance of the purchased money essentially grows, you take the gain and close the place.

Money pairs comprise of a base currency, which will be the very first on a counter currency, as well as the quote.
The Forex has an essential part on the planet market. As a result of the development of international trade and technology, there’s an increasing must exchange money. In addition, the enormous liquidity enables traders to speculate on monies. Clearly, with this intent, it is critical to make use of investment strategies that are valid.

In conclusion, the Forex is a global market where every country’s cash is sold and bought. Marketplace participants determine entirely the cost of a single currency against another. There’s no outside control. All participants can determine to enter the marketplace. From this perspective, the Forex is a market that is perfect, because its participants cannot command it.

forex introIt needs to be noted that one unit is equal to the speed of change to better comprehend the style of Forex quotes. As an example , in the event the pair formed by the euro and dollar, using the euro as the base currency, is trading at 1.2762, the cost of one euro in dollars will be 1.2762 dollars.

In Forex individual contracts are used by you. The standard contract size is 100,000 units. In cases like this in addition, you talk about one lot. For every lot, the dealer commands 100,000 units. Some agents allow miniature accounts to start.

Such a contract’s size is 10,000 units.

Unlike other markets, the Forex enables margins that are quite low as a result of using leverage.
There are many instruments which help the dealer to help make the choices that are correct in the marketplace. The fundamental analysis relies on local political events and international market. The technical analysis considers cost, quantity plus time of trades. The latter makes forecasts on costs through statistical computations and presupposes the repetitiveness of the marketplace, examines the quotes. Technical analysis and fundamental analysis are complementary to every other. An expert dealer must learn the best way to make use of the very best. The professional trader must learn the best way to see the cost graphs, and has to know about the very significant economical news. Remember the need for a great trading strategy, that could only be developed through encounter. Buying Forex isn’t a game, it takes sacrifice and lots of dedication. Finally, but the money marketplace will repay your time and effort.

Forex is definitely going. You might choose to keep an open location for a lengthier period or for a brief period. This depends by your trading strategies.

What Exactly are Exchange Traded Funds

Exchange Trade Funds (ETFs) are cousins. They correspond to baskets which can be purchased and sold like stocks. Usually, is a one day delay following a sell order is put on a mutual fund; ETF sell orders are executed promptly during hours. Within a market crash this difference may not be insignificant. ETFThere are many other edges. Except for brokerage fees there are none of the maintenance fees related to mutual funds. Additionally, there aren’t any loads [punishments] connected with starting a mutual fund account.

What’s a Leveraged ETF?

Within recent years, a fresh category of ETFs has appeared – leveraged ETFs. To help leverage to be understood by you, let us use an example: let us say we’ve XYZ, ABC and two equities. For each change in ABC’s cost, double the percentage move shifts in the cost of ABC. If ABC were to shift 5% subsequently 10% would be changed by XYZ. See if ABC were to transform that XYZ would shift by two dollars, this doesn’t indicate. It is the percentage change not the dollar sum.

Previously, it was common for investors to apply margin within their IRA accounts. You aren’t allowed to make use of margin in a IRA account. Margin let us you borrow money from your brokerage in a share rate. It is possible to borrow up to 50% of the cost of a stock once the margin account is started and functional.

Here’s a good example. Let us say you would like to get $20,000 worth of Business A stock, 50% of it. Meaning you must have at least $10,000 cash in your account, letting you borrow the other $10,000. The same as a financial institution, interest on the loan will charge you. Rates will be determined by the balance in your account in addition to the existing interest rate environment and fluctuate between companies.

Previously you needed to use margin to be able to have leverage in your IRA account. Leveraged ETFs are structured so that no fee is included. Normally, when you locate an ETF that is leveraged its fundamental ETF is a broad based index.

For instance, SPX is an ETF that characterizes the S&P 500. The S&P 500 is additionally represented by sSO. Nevertheless, it’s leveraged 2:1 compared to SPX. Meaning that if 2% is gone up by SPX, 4% is gone up by then SSO. You receive the leverage without borrowing from your own brokerage, you’re after. Additional fees will not be incurred. Also, purchasing these leveraged ETFs is permitted in an IRA account.

This graph compares the ear-to date operation versus SSO. SPX has an increase of 3.77% while SSO has increased 8.13%.

Another case is UWM. Twice IWM’s percent move transfers. Incidentally, IWM is the Russell 2000. The Russell 2000 consists of two thousand stocks and represents a wide section of the stock exchange.

Need more leverage? Purchase TNA and get three times the move.

Use Inverse ETFs and Leveraged?

You may believe trading ETFs that are leveraged is not safe. But as one mentioned previously, they correspond to broad based indexes. In comparison all these are far better acted. Stalwart stocks have lost bundles because of their investors within recent years. You’ll find tons of stocks that all of us understand which acted likewise. Purchasing stocks means that you must be an excellent stock picker.

use ETFThe government warns investors from shorting the marketplace. In a down market, people that have retirement accounts had just two options: either remaining cash and be shielded or hold your investment and observe its worth decline.

How many people are great stock picker’s? One am aware I am not. Generally stocks are picked by investors due to business news. Sadly, by the time you discover the news, half the world knows about it. Needless to say , you will make an excellent gain by picking a victor. Instead, leveraged ETFs are preferred by many, both for gain possibility and their security.

This issue is solved by inverse ETFs. In a market that is dropping your long places can be closed by you and purchase inverse ETFs.

What’s an Inverse ETF?

Another new class has emerged, called inverse ETFs. A good example of an ETF that is inverse is TWM. The Russell 2000 is represented by tWM but inverse goes to IWM. As an example, if 2% is gone DOWN by IWM, 4% is gone UP by subsequently TWM. Now it is possible to play with a down market even

Need leverage that is inverse? Use TZA. TZA is an inverse ETF that represents IWM, (Russell 2000). If IWM goes down 3%, 9% are gone UP by TZA. Through the market fall in 2008, people who held TZA made a fortune.

This 3 year graph shows the UWM that is leveraged using its inverse TWM. When one goes up the other goes down.


The most significant basis for trading has to do with compounding. To keep things easy, let us suppose bearish half the time and the market is bullish half some time. Additionally, suppose we increase 5% in successive intervals. The net profit in the event you’d just traded in the bull market could be 5%. But in the event that you’d dealt in both intervals your net profit wouldn’t be 10%. It could be 10.25% because of compounding. Over time, the tiny difference would not become insignificant.

The best way to Deal Inverse ETFs and Leveraged

One use three guide posts to deal these ETFs: a market timer that is great, an entry state to make sure the ETF is going in exactly the same course as sensible cash management and the marketplace. Together, drawdowns related to leveraged ETFs have been removed by these three principals. Because of this, I have had the opportunity to sleep well at night while producing gains that are great over the course of the day.

It’s possible for you to tell by these graphs that leveraged their underlying broad based indexes are not more explosive than ETFs. You won’t succeed in case you try and implement your trading strategy to the three principals. Instead, keep using it. Just trade the leveraged.

Cross-Pair Basics

cross pairsA “currency cross pair”, also called “cross-currency pair” or just as a “cross”, includes some of monies neither of which will be the United States dollar. A good example of a money cross pair is the GBP/JPY, where the two monies in the quotation would be the Japanese yen as well as the British pound. Other examples contain EUR/CAD, CHF/JPY, EUR/JPY, and AUD/CHF.

In ancient times, in the event you wished to convert one currency to a different, you’ll be required to exchange the former before changing the dollar amount into your money that was desired.
For instance, whenever an individual wished to convert his British pound he’d have change these dollars, and then to begin by changing the british pounds to the almighty dollar. Cumbersome, could it be?

To compute money crosses is easy. For instance, if we should get the bid/ask price CHF, we’ll begin by viewing the bid/ask price for both GBP/USD and USD/CHF. These pairs will be looked at by us because the two of them have the United States dollar as their common denominator. GBP/USD and USD/CHF are known as the “legs” of GBP/CHF since they have been the United States dollar pairs linked with that.

Yet, together with the introduction of the theory of cross-currency pairs, this cumbersome procedure was simplified. It’s now possible to change one currency for another while avoiding to convert it. Therefore, money cross pairs allows for an immediate exchange between two currencies.

Now, if we found the following costs for the pairs:

GBP/USD: 1.5000 (bid)/ 1.5005 (request)

USD/CHF: 0.9800 (bid)/ 0.9803 (request)

currency pairsSubsequently, to decide on the bid price the bid prices just multiply . If we do the mathematics, this comes to 1.4700. To get the ask price for GBP/CHF, we multiply the ask prices for GBP/USD and USD/CHF, which comes to 1.4709.

Money cross pairs are essential in the forex market by giving them with more monies to trade, since they create more chances for dealers. Essentially, chart patterns formed by combinations are not dirtier than they’re to another major currency pairs; so, they’re not more difficult to predict. In the event you would like to keep off from trading the United States dollar because of another matter or a major incident, then cross currency pairs is the most effective choice.

What Affects Currency Value

Folks sell and get different monies each day of the entire year, and numerous of them do not even think of what really changes that distinct currency’s value. what affects currency valueIf you’re involved in forex currency trading then you certainly will probably understand what can make an monies value go up or down, but if you’re only purchasing a money because you are going on vacation through example then you certainly could not have any notion of what can make your funds worth a lot more or substantially less when you are making do with yet another money. If you’re thinking about analyzing about what can affect the worth of a money more afterward simply read on:

The Market:

The economic climate together with the nation (or countries inside the specific situation of Europe and so forth.) is among the most important variables that may determine how much a special type of money could be worth. Then the financial value of the money will be pretty stable which is definitely a good idea to get an amount of nations or a country in the event the economical climate is normally in sound condition. When the economical climate is possessing a difficult time afterward the value in the money will often go up and down in worth more than brief amounts of time that isn’t what men and women want to see when buying and encouraging monies and so on since it will be detected as a “insecure” money.


Speculation may have a significant effect how much one currency is worth in comparison to some other money. For instance, if a well respected economist tells the planet he believes the EU will have trouble making use of their exports subsequently countless people may perhaps get stressed about the worth and from then it becomes it actually is a vicious circle. Some individuals will subsequently start removing the money they have in euro, that will further devalue the currency and so on. Conjecture nonetheless, can raise the worth also, considering that some speculators might consider that the particular state (or countries) are around do well.


When nations’ authorities make enormous blunders or are getting it difficult to bring in enough money to cover their cost then forex dealers generally have an inclination to discontinue getting the money which is definitely utilised because nation. The money will be devalued by this after yet again contemplating that there’ll probably be less demand for this money, and just as it becomes a vicious circle. This really is yet another cause why authorities need to be really careful concerning the problems that the speculators put in position inside the economical climate that they run.

Grid Trading in Forex

The Forex grid trading system uncommon as it may be now, entices many dealers to come and give it a go. Why? Well, that is due to the major benefits when they had the ability to get it done correctly, that you could get. Just put, selling and purchasing exactly the same money as a way of making a hedge is not the simplest thing on earth to achieve. As well as the reality when do not have any clue what you are doing, it may also be an extremely high risk investment. Now, you can find a variety of matters that the dealer would require when they’re intent on giving this kind of trading a go. fores gridsThe primary thing you will want is the account that could enable the various kinds of trades of an agent. But this is somewhat tricky in a few areas of earth from being forced to trade trades open in once which actually forbids dealers. This also extends for their power to put other entry which will activate at predetermined price levels and also goal orders.

There’s an alternative challenge to conquer when you get the account. This fighting boredom and might be your personal mindset. Day traders or forex dealers quite seldom let any deals to be energetic beyond a certain amount of days. But in regards to Forex grid trading, you will have to use comparatively big size grids that are usually 400 or 150 pips as this may help lower any dangers. Yet this means that this grid system might take as much as a week before it activates a month as well as a trade before you may get a consequence after that. As it is possible to observe, the waiting interval might get in the event you’re used to doing things fast and economically then you would like to just lose interest. Only tend not to make the error of lowering the size of your grid because doing that could raise the danger amount to be able to shorten the waiting time.

So there you’ve got it, some of the items before giving Forex grid trading a go, that each dealer must find out about it. Remember, do your research nicely so that you will be ready for just about any challenges.

Forex Candlestick Basics

In virtually any Forex Currency Trading class that is credible, the Forex instruction syllabus should begin with a concentration on the essential aspects of a candlestick. Candlesticks are trusted around the world as hints and make up including engulfing pattern and dark could covers, trading creations. fx-candlesIn this Forex instruction post, we’re planning to only concentrate on the principles rather than these candles are utilized. Additional info on how best to work with the candles is likely to be furnished in posts that are upcoming.

With an open, firm stocks, money pairs, commodity stocks as well as other stocks start in every trading session. Various components which we won’t cover in this post but may be viewed with a candlestick effect the open cost. By the end of the session the marketplace also offers close which is reflected in the candlestick. Through the session the market price will go down and up, so in-between the close as well as the open, the marketplace will also provide high and a low of the day. Please copy and paste this URL into another tab in your browser to enable a comprehension of the below explanation of the candlestick

Most times, actual bodies could have straight lines poking from underside and the top. These lines are called ‘Darkness’. Rationally, they’re defined as ‘upper shadows’ and’ shadows’ depending on where they’re. Shadows essentially represent the highs and also the lows of the session i.e. the greatest and the lowest cost that the stock has reached within that session. As the amount of trades will differ throughout various trading sessions likewise to actual bodies, shadows will even change in height.

The rectangular segment of the candle is known as the ‘Actual Body’. In uncomplicated terms, the true body symbolizes the beginning as well as the conclusion of the session i.e. the session’s open and close. In the event the body of the candle is black (or red in several situations), the marketplace has closed below the open of the session. In reverse, when the candle is white (or green in lots of situations), the marketplace has closed higher in relation to the open in the trading session. candlesticks in fxThus, if you’re taking a look at a candle that is black the open is in the very best and in case you are considering a candle that is white the open is in the underside. The height of the bodies that are actual will change through the graph as distinct volumes of trades are carried out.

The stature of the actual body will give us an indicator of the strength the bulls (buyers) along with the bears (sellers) possess. It’s clear the bulls have been in control in case the candle is white. In case the candle is black, the contrary is true i.e. the bears are selling and are in control. Likewise, location and the length of the shadows will give us an indicator of purchasing/selling pressure that is implemented through the entire session. Throughout your Forex instruction you’ll find many differences of candles/shadows that are such. Some will have no bodies that are actual plus some will have no shadows. No matter the arrangement of the candle nonetheless, it is going to supply us with an essential insight to the sate of the marketplace.

Forex Hedging 101

Just what is Forex hedging? Essentially, this can be a strategy that many Forex dealers utilize as a means of reducing hazard amounts normally related to the Forex market. It’s since you are still fairly new and have not been correctly acquainted with the different techniques you can use to shield yourself from potential loss in the event you’re unfamiliar with it. hedging forexThe strategy calls for having to trade money pairs in order that they might be shielded from any change. To create things more easy, think of it as insurance coverage that you simply will have so that you can safeguard yourself from any injury that may cause you major financial losses to buy. Still, it’ll be unable to shield you 100%. You will still feel the negative effect of the event had you not chosen any precaution, . however, it isn’t going to be as great a sit would’ve been.

To efficiently use Forex hedging, you will have to use several Forex trading indicators that ought to help in regards to potential market movements you make forecasts. A few the FX trading indicators that are most frequently employed contain Straightforward Moving Averages and Bollinger Bands. But there tend to be more choices thus do acquaint yourself better. These indexes, when they’ve been competent would help make you and minimize hazards a better dealer at the same time. Couple this and you have got rather the recipe for forex currency trading success. For hedging strategies, you’ve got rather numerous various choices to pick from utilizing the difference, including utilizing derivatives in future contracts and using several pairs of money.

So there you’ve got it, some of the things you need to understand about before you give Forex hedging an attempt.

Then you’re able to use your strategy on your commerce as soon as you have selected it. Remember that you need to track the movements of the marketplace as you will have to correct your choices correctly. All things considered, there’s no one-size fits all strategy and therefore, you should keep changing just as much as the marketplace does. So constantly be on your toes.

FX Mini Account and Standard Account: Understanding the Difference

forex accountsFor the retail investor, in forex, matters are completely different than associations and the banks who trade every day on a daily basis and also in the millions with genuine trades occuring (generally -3 days later also called the Spot Worth).

Investment banks will take a credit check on each other out, like when someone applies for a mortgage, a bit. Whilst money trades finished and are put realtime either phone or by computerised system, the particular transport of funds occurs a few days later.

So what about mini-forex trading. It is an area which a lot of people appear to need to learn about. What’s a mini-forex trading account? What’s miniature forex currency trading? Miniature forex currency trading is very simple to describe given the aforementioned advice. In light of the info which is told for you above about retail forex trading generally, a mini- account’s use is just that!

Rather than trading 1 whole lot each time (ie commanding 100,000 units of money using just 1000 units of security or deposit to trade for a gain of about $10 per pip according to the forex currency pair you and trading) you may use a mini-account (occasionally this is completely indistinguishable from a normal account) to deal a fraction of a lot. This might technically be no more than 0.1 bunch (ie $1 gain per pip) or half a lot – $5 gain per pip etc. Here is the writers comprehension of mini-forex-trading.

Nevertheless, in the agents novels, generally, the commerce is placed together with the retail forex dealer even though the retail investor is in effect trading with all a rather similar spread nowadays and with the banks at nearly exactly the same quotes with no actual transfer of funds happens.

So who’s the forex agent and what exactly is their relevence in the response to this forex subject? Their trades are placed by the retail investor throughout the margin broker’s environment. Trades are put using a dealer who receives the order from your investor and in real time, either purchase (long), sell (short) or place that was close.

The agent not only enables retail investors to trade forex dwell with all the banks, but additionally supplies a system. It follows that a deposit to represent the total amount of money is just required by the agent an individual desires to command, so long as the deposit is sufficient to cover any losses which may be incurred by the trade.

Consider a margin leverage of 100:1 given to you by the agent. This means to command $100,000 of real money (1 bunch), you have to supply security to just $1000’s agent. Each ‘pip’ motion in cost will cause your equity fall or to grow by $10. For instance in the event the currency pair you’re trading is GBP/USD (also referred to as cable) and also the cost you’re quoted is 1.8484, this means 1 UK pound sterling is equivalent to 1.8484 US dollars.

accounts in forexAnd so, if you’re commanding 100,000 units of money (or you’ve put a purchase/sell forex commerce of ‘1 bunch’)in the preceding scenario, each time the cost shifted – ie. 1.8484 changes to 1.8485 – you acquire or lose $10 US. It is because 0.0001 x 100,000 = 10 and you’ve chosen to command 100,000 units of money.

The astounding thing though is that you as a retail dealer have just used a security measure of $1000 deposited with all the agent in your brokering account and also the sole price for putting the commerce is a little spread (no assignment in several instances) of say 2-3 pips by which the agent makes his gain no matter whether your commerce is successful or not. And also the odds of you losing that whole $1000 in the commerce are incredibly slender, particularly when you employ risk management and safeguard your capital from losses by establishing a “stop loss” – a theme out from the range of this short article.

In conclusion then, mini forex trading is explained away by understanding what a ‘ton’ is in forex. When you understand that forex is traded in ‘lots’ and what ‘1 lot’ means to the investment banker/forex dealer in the financial institution and also to the retail investor using margin leverage given by means of an agent, it is possible to realize that mini-forex trading is forex trading on a mini-scale. Instead of trading in lots or multiples of lots (more than one) the retail investor uses a smaller deposit together with the agent and trades for less gain, but less threat also rather than wanting so much gain to start out with, eg 0.1 lots or 0.5 lots. Some forex brokers these days enables money trading into a customers account having a deposit of no more than $500.

6 FX Currency Hedging Strategies

hedging strategiesIf you’re managing, a tremendous MNC or running a company that prices in exports and imports or you’re an individual who copes with large scale money trades then you’ll be having knowledge of money hedging. In today’s age of globalization, it’s an absolute necessity.

Hedging is simply a technique to lessen hazard. The exchange rates are not predictable and may change at any given time. This instability can result in significant losses if there are the specific date as well as negative changes between the trade date. Money hedging’s purpose will be to minimize the danger.

Foreign Currency Hedging

Like all the hedging strategies it also includes taking two contrary places in various markets that are parallel or two counterbalancing places. Canceling counterbalance places or places suggests that additional gain in another standing compensates the additional loss in a single place.

Foreign Currency Hedging Strategies

There are lots of ways. They are sometimes separated into external and internal strategies. A few are:

  1.  Subsequently is a notion of netting as a result the losses are compensated by the gains which includes clubbing of the receipts and payments in a money.
  2.  An investor can pay in advance or pay his forex payments according to his expectation of the foreign currency later on. In other words an appreciation in national money or depreciation translates into higher payments and receipts that are lower .

The hedging strategies that are outside tend to be popular as they offer a a range that is broader compared to internal. Some outside strategies are:

Forward Contracts

These contracts lock a fixed exchange rate for the receipts as well as the payments. Usually, the rate is the forex rate that the marketplace determines. Equilibrium is offered by the contracts to the receipts as well as the payments. Both the payer as well as the receiver understand the quantity received or to be paid as well as the present exchange rate on the trade date scarcely matters. This not only restricts the losses but in addition limit the additional gains that you might have made when the rate on the trade date been less unfavorable compared to predetermined speed.

fx hedgingCurrency Swaps

These trades happen in real time i.e. the exchange takes place instantaneously without any delay in time. In this the there’s an exchange of the principal and payment of a fixed interest contract of a single money is swapped with a different money.

Foreign Money Options

The the derive their worth in the essential tool, which they represent. Thus, currency options are based on forex. Currency provide the right although not the duty to buy or sell foreign currency that is particular to the buyer or seller.

Area Contracts

One process where an individual can safeguard himself in the negative exchange rates is by taking the area contracts. Here receipts and the payments to get a contract are paid on one or two days or the day from then on. As you will find fewer opportunities for substantial changes in the exchange rate in this duration that is modest, therefore it safeguards the person from forex threats.

3 Kinds of FX Traders

kinds of traders in forexOf the many components that go into the decision making process of a successful forex trader, finding a trading strategy that works for you is one of the most important parts. But even if you have a winning forex trading strategy, it is in your best interest to determine what your currency trading style is. Forex traders come in three basic varieties: Scalpers, Day Traders, and Position Traders, with the majority of traders falling into the middle category.

A scalper is somebody who goes for small profits usually in the range of 3-10 pips, will usually base their trades on a chart with 1-minute to 5-minute candlesticks, and will tend to place multiple trades in a single day.

A day trader will hold an open position anywhere from 15 minutes to longer than one day. They will be using a time frame of maybe two different charts with 5-minute and 15-minute candlesticks (possibly 30-minute if they are a longer-term day trader), and will tend to set profit targets of 10-50 pips.

A position trader is one who will go for long term gains and will place their trades based on a 1-hour or 4-hour candlestick chart. This trading style requires a large risk tolerance, and profit targets will tend to be over 50 pips and as high as 4 big figures or more (400 pips or more).

Determining which type of forex trading style you prefer and which one matches your trading strategy the best is a very important step that many traders never take. Choosing and sticking with a certain trading style can allow you to see which trading opportunities to pursue and which ones to avoid, such as whether you should focus on following fundamental-based or technical-based trading indicators.

Choosing a specific trading style is also important because you can see which currency pairs and currency crosses to trade and which ones to avoid. For example, if you decided that you were a scalper and you wanted to go for small profitable trades multiple times per day, you would want to trade a currency pair that had a very small spread. If you were trading a more exotic non-dollar currency cross then this would tend to have a much higher spread and make a profitable scalping strategy nearly impossible.

Conversely, if you decided that being a position trader was the best route for you and you were willing to hold positions open for days at a time or even a week or two, then a 9-pip spread on an exotic currency cross may not seem like such a big deal since you might be aiming for a profit target that is larger than 200 pips. Depending on which forex trading style you choose, there are different considerations to be made for each one and there are also profits to be had with each one.