The Long and Short of it, by James Stanley, Forex Trading Instructor

The Long and Short of it, by James Stanley, Forex Trading Instructor
The Long and Short of it (Photo by,

Aspiring traders will often be familiar with the concept of buying to initiate a trade. After all, since many of us are children we are taught the basic premise of ‘buying low, and selling high.’

In financial markets, jargon often plays a key role. Jargon helps show familiarity and comfort with a particular subject matter, and nowhere is this jargon more apparent than when discussing the ‘position,’ of a trade.

When a trader is buying with the prospect of closing the trade at a higher price later, the trader is said to be going ‘Long,’ in the trade. The following graphic will illustrate the dynamic of a long position:

While this premise may seem easy enough, the next may be slightly more unconventional to new traders.

The concept of selling something that isn’t already owned may prove as a confusing concept, but in their ever-evolving pragmatism traders created a mannerism for doing so.

When a trader is going ‘Short,’ in a trade, they are selling with the goal of buying back (to cover the trade) at a lower price. The difference between the initial selling price, and the price at which the trade was ‘covered,’ is the traders profit to keep less any fees, commissions, or selling expenses. The chart below illustrates a ‘Short,’ position.

It’s important to note the interesting distinction between currencies and other markets. Because currencies are quoted with two sides (each quote references 2 different currencies taking opposing positions), each trade offers the trader long and short exposure in varying currencies.

For example, a trader going short EUR/AUD would be selling Euro’s and going long Australian Dollars. If, however, the trader went long the currency pair – they would be buying Euro’s and selling Australian Dollars.

Written by James B. Stanley

To contact James Stanley, please email Instructor@DailyFX.Com. You can follow James on Twitter @JStanleyFX
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Currency Names and Symbols, by Richard Krivo, Trading Instructor

Currency Names and Symbols, by Richard Krivo, Trading Instructor
Currency Names and Symbols, by Richard Krivo, Trading Instructor
As you may have noticed, the symbols (abbreviations) for all currencies have three letters. The first two letters denote the name of the country and third letter stands for the name of that country’s currency.

As an example, let’s look at the USD. The US stands for United States and the D stands Dollar.

The currencies on which the majority of traders focus are called the “majors”. The most widely traded currencies are represented on the grid below:

Not to be confused with major currencies are the major currency pairs. The Major Pairs are any currency pair with USD in them. For example, the EURUSD would be considered a Major Pair.

Currency pairs without the USD in them are referred to as Cross Pairs. The EURJPY would be an example of a Cross Pair.

To carry this one step further, any EUR pair without the USD in it would be referred to as a Euro Cross. So the EURJPY would be a member of the EURO Cross group. Other member of that group would be EURGBP, EURCHF, EURNZD, EURCAD and EURAUD.

Other currency groups of this type would be comprised of the JPY crosses, GBP crosses, AUD crosses, NZD crosses and the CHF crosses.

by Richard Krivo, Trading Instructor /
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The Basics of How Money is Made Trading Forex

The Basics of How Money is Made Trading Forex
The Basics of How Money is Made Trading Forex (

Trading currency in the Forex market centers around the basic concepts of buying and selling.

Let's take the idea of buying first. What if you bought something (it could literally be almost anything...a house, a piece of jewelry or a stock) and it went up in value. If you sold it at that point, you would have made a profit...the difference between what you paid originally and the greater value that the item is worth now.

Currency trading is the same way...

Let's say you want to buy the AUDUSD currency pair. If the AUD goes up in value relative to the USD and then you sell it, you will have made a profit. A trader in this example would be buying the AUD and selling the USD at the same time.

For example if the AUDUSD pair was bought at 1.0615 and the pair moved up to 1.0700 at the time that the trade was closed/exited, the profit on the trade would have been 85 pips. (See the chart below…)

 Had the pair moved down to 1.0600 before the trade was closed, the loss on the trade would have been 40 pips.

Also, it makes no difference which currency pair you are trading. If the price of the currency you are buying goes up from the time you bought it, you will have made a profit.

Here is another example using the AUD. In this case we still want to buy the AUD but let’s do this with the EURAUD currency pair. In this instance we would sell the pair. We would be selling the EUR and buying the AUD simultaneously. Should the AUD go up relative to the EUR we would profit as we bought the AUD.

In this example if we sold the EURAUD pair at 1.2320 and the price moved down to 1.2250 when we closed the position, we would have made a profit of 70 pips. Had the pair moved up instead and we closed out the position at 1.2360 we would have had a loss of 40 pips on the trade.

Remember, we are always buying or selling the currency on the left side of the pair. If we buy the currency on the left side, which is called the base currency, we are selling the one on the right side which is called the cross or counter currency. The opposite would be true if we were selling the currency on the left side.

Now let's take a look at how a trader can make a profit by selling a currency pair. This concept is a little trickier to understand than buying. It is based on the idea of selling something that you borrowed as opposed to selling something that you own.

In the case of currency trading, when taking a sell position you would borrow the currency in the pair that you were selling from your broker (this all takes place seamlessly within the trading station when the trade is executed) and if the price went down, you would then sell it back to the broker at the lower price. The difference between the price at which you borrowed it (the higher price) and the price at which you sold it back to them (the lower price) would be your profit.

For example, let’s say a trader believes that the USD will go down relative to the JPY. In this case the trader would want to sell the USDJPY pair. They would be selling the USD and buying the JPY at the same time. The trader would be borrowing the USD from their broker when they execute the trade. If the trade moved in their favor the JPY would increase in value and the USD would decrease. At the point where they closed out the trade, their profits from the JPY increasing in value would be used to pay back the broker for the borrowed USD at the now lower price. After paying back the broker, the remainder would be their profit on the trade.

For example, let’s say the trader shorted the USDJPY pair at 76.28. If the pair did in fact move down and the trader closed/exited the position at 75.81, the profit on the trade would be 47 pips.

On the other hand, if the pair was shorted at 76.28 and the pair did not move down but rather it moved up to 76.50 when the position was closed, there would be a loss on the trade of 22 pips.

In a nutshell, this how you can make a profit from selling something that you do not own.

In wrapping up, if you buy a currency pair and it moves up, that trade would show a profit. If you sell a currency pair and it moves down, that trade would show a profit.

by Jeremy Wagner, Head Forex Trading Instructor,

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What is Forex? By, Jeremy Wagner, Head Forex Trading Instructor

What is Forex? By, Jeremy Wagner, Head Forex Trading Instructor
What is Forex? By, Jeremy Wagner, Head Forex Trading Instructor Pic by,

What is forex? Why trade forex?

The foreign exchange market – or forex for short – is the buying and selling of currencies, and it’s one of the fastest growing markets in the world. From 2007 to 2010, forex market activity increased by 20%, with average daily turnover reaching nearly $4 trillion in April of 2010.

Forex trading works much like it does with stocks, you buy low and you sell high. The benefit of trading forex is that you don’t have to choose from thousands of companies or sectors. Plus, you can make things even simpler than choosing which company to buy.

For example, most people, even those that are new to forex, have an opinion on the US dollar and the US economy. They can easily take their opinions and translate them into a forex trade. Buying or selling US Dollars as simple as they buying or selling a company’s stock.

Also, another advantage of the FX market is that it doesn’t begin at 9AM and end at 4PM. Trading takes place 24 hours a day, 5 days a week. For most people 24 hour trading means they can trade before or after work. Plus, you have the flexibility to make your trades online.

What is Forex? By, Jeremy Wagner, Head Forex Trading Instructor

Plus, you can buy and sell at any time, in up trends (also called bull markets) and in down trends (also called bear markets).

It’s easy to get started. You can sign up for a free demo with FXCM and get $50,000 of virtual money to practice trading online with one of FXCM’s easy to use trading platforms, including mobile and tablet offerings. At FXCM we provide all the educational resources and trading tools you need to go from practice trading to real trading. Online educational seminars and a suite of video lessons are only a few examples.

The time to trade forex is now. Join the millions of traders around the world.

By, Jeremy Wagner, Lead Trading Instructor, DailyFX Education from
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The Big Implications of the Google, FTC Antitrust Scandal

The Big Implications of the Google, FTC Antitrust Scandal
The Big Implications of the Google, FTC Antitrust Scandal

A 160-page report that was far more complete than the FTC no doubt wanted last week was leaked to The Wall Street Journal, clearly showcasing that the FTC staff recommended action against Google for anticompetitive practices.

The FTC commissioners then decided -- indicating that they treat staff reports about like executives in public companies do (been there done that) -- to let Google off the hook, apparently because it made some minor changes. Because the Obama administration and Google have been especially cozy, that move gave the impression that the FTC was effectively in Google's pocket.

This scandal -- and it does count as a scandal -- suggests three things: One is that we have another three-letter agency that can't spell "document control"; two, that the FTC's ability to argue it isn't controlled by the Obama administration just took another solid hit; and three, that the EU now will likely step in and use this to jump on Google's head.

This has something for everyone -- a hint of cronyism, a dash of corruption, a taste of government incompetence, and just a smidgen of hypocrisy (an administration that ran on a platform of its predecessors not being transparent being even less so).

I'll dig deeper into that and close with my product of the week: the Dell Venue 8 7000 Tablet -- the halo product from Intel and Dell that I've been using for a few weeks.

 Document Management

Considering that it ran on "transparency," it is somewhat ironic that the Obama administration's transparency generally has resulted from folks like Bradley Manning, Eric Snowden, and now some bureaucrat (likely ex-bureaucrat) -- who likely was overworked and underpaid -- deciding to give The Wall Street Journal and other news services one hell of an early birthday present.

No wonder ex-Secretary Clinton had her own email server -- for all she knew, her entire email repository might have been gifted to her political rivals several times a week. Granted, since it likely wasn't secure that may have happened anyway, but seriously -- whatever we are paying for information security, we are clearly paying too much, because the security we are getting is crap.

It isn't that hard to call Varonis, the firm that specializes in problems like this, and take a meeting. I get that the government isn't telling me the truth very often -- I really don't need to have my face constantly rubbed in that fact -- and I have to wonder how often these mistakes are made with folks like foreign governments that don't make their "gift" public, rather than a newspaper that does. Christ -- what is it going to take to put some controls in place to stop this B.S. -- a leak of pictures of the first family in their birthday suits?

You may think I'm joking, but given how badly the Secret Service is behaving, I don't think even that scenario is a stretch.

The FCC and FTC, in theory, are at arm's length from the political side of the administration, as is the IRS. First the IRS came under fire for acting in a partisan fashion against conservative nonprofit organizations. Then the FCC came under fire for being the agent of the administration with regard to its Net neutrality stance. Now, the FTC looks like it unusually favored a big Obama donor and political ally. It has gotten so screwed up that AT&T (too many three-letter things) actually is using the FCC against the FTC. Seriously, speaking of three letters, WTF?

Granted, this may all be smoke, but it is a lot of smoke -- and collectively, it paints a picture that will make it hard for any of these organizations to survive the next election process intact, let alone get anything done now.

It isn't hard to imagine that the conservative side will use fixing these organizations as a primary political argument for giving them more power. They don't have to invent anything -- these agencies do look to be out of control, and that means it is becoming far more difficult to get anything major done, because they are increasingly untrusted.

There is no upside to a government that appears both inept and untrustworthy.
Google's Lesson

Google needs to read up on Standard Oil, because it stopped trying to repeat Microsoft's mistakes some time ago and now appears to be going down the Standard Oil path.

Standard Oil was a huge scandal in the first half of the last century. Because folks came to believe they effectively controlled the government, the firm was painfully taken apart. The U.S. effectively lost control of the world oil market as a result, and that did some rather ugly things -- particularly in the gas-starved '70s, when some government idiot thought building crappy cars would fix all our woes.

You may recall that when the U.S. government failed to break up Microsoft, the EU decided to beat the company over the head with a stick until it effectively gave up much of its control over key products. The EU likes pointing out that the U.S. regulatory organization is, pick one, corrupt or incompetent, and likely will use this leak to help nail Google's hide to the wall.

Once you get to Google or Microsoft's size, you no longer need to play dirty. Ironically, during the Microsoft trial, we learned that none of the dirty things Microsoft did actually worked, which really added insult to injury for that firm. In Google's favor, it did make changes and didn't publicly call out the Attorney General or some such silliness, but the international focus on Google continues to grow.

At some point, if Google doesn't dial it back a bit, they are going to find that governments don't have a problem raising money from fines, and billion-dollar fines aren't even that unusual anymore. In short, if Google doesn't want to be Standard Oil or RCA, it needs to stop acting like it needs to be broken up.
Wrapping Up

We had great hopes for Obama, who presented himself as technically competent, but that competence unfortunately was applied only during the election and re-election process, and not as part of his administration.

It is pretty clear now he really doesn't get technology. Maybe that goes to the heart of the problem more than anything else.

Leaders today, to be effective, have to understand technology in order to comprehend how problems are identified and fixed, and to understand how security actually works. He doesn't get any of that, which likely explains why the government seems to be such a mess at the moment.

Hopefully, the next president will not just create a technology image, but actually understand how it works -- so maybe we can at least fix some of the new problems the current administration is accidentally creating for us.

 The Dell Venue 8 7000 is a halo product from Intel and Dell that showcases both companies' mobile capabilities. Granted, Intel is actually on a roll at the moment, announcing an Intel-inside watch with no less a watch powerhouse then Tag Heuer.

However, the Venue 8 7000 has three clear advantages over other tablets in its class, most notably the iPad mini. It has the Intel Real Sense depth camera, which allows you to change focus after the picture is taken and potentially measure things accurately from their pictures.

It has an OLED screen, very rare in tablets, which is brighter and better looking than LCD alternatives. Also, it is one of the thinnest tablets ever made, which showcases that Intel can make a processor that works in this class of product and works relatively well.

Like all Halo products, the technology is a bit ahead of the user experience, which means there are some slightly annoying aspects to this -- like the fact it doesn't suspend when you close a cover over its face, or it doesn't have a flash for taking pictures in low light or at night. Granted, given the nature of the camera, it would require a rather unique kind of flash. The camera has three very separate lenses and sensors.

In use, the camera is light, with decent battery life (more than 10 hours) , a screen that makes other tablets look dull in comparison, and amazingly good front-mounted speakers (though most of us likely will use headphones). Performance is in line with other tablets when playing games like Kingdom Rush, which I'm currently hooked on. Both movies and TV -- mostly Netflix and Amazon Prime -- are excellent.

Overall, the Dell Venue 8 7000 has turned into one of my favorite tablets this year, and I'm a long- time Kindle fan. The Venue is a decent reader, so it is a good showcase for Dell and Intel's capabilities, and it is my product of the week.

by, Rob Enderle from
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