Is Red green and Green Red?

Beginner Questions
1

Hi, if anyone can help me with this…I’m studying the Babypip course and a few of their concepts arent making sense to me when I try to realise them real time. They’re very basic so pls be patient. Essentially, I’m confused at the green light/red light display.

So Babypips says if a currency pair e.g. EUR/USD; If the USD is weak and EUR strong you buy the EUR/USD; The indicators on the app I’m using have them at Red…doesn’t that indicate the USD is down against the EUR? Therefore, red I thought you short and sell? Why am I buying if I believe the USD is weak and the pair are red???

I’ve never been so confused since this great idea to set a second income stream and and trade. Maybe I should just stay in regular work…

2

It doesnt make sense…

What is green light red light display?
What app are you using?
How do you know it works?
What does it show?
What does red and green mean on your 'app’s?
How do I know what red means in your app? I dont have it.

I dont know why you are buying?
If you believe usd is weak then yes you might buy eurusd.
I dont know what ‘red’ mean…

Please explain more.

3

Don’t get discouraged, it takes time. Maybe you can just look at the price chart and not the indicator; if you think it is going up, you go long. if you think it is going down just go short.

Why did you want to learn Forex instead of stocks if you don’t mind me asking? Are you looking to trade or invest?

Also, what other colors do you see on your app? Most of the time the colors indicate red if the bid is hit then blue (or green) when the ask is hit. Another time the color changes is if the price is above the day’s open or below the day’s open–I never pay attention to any of that to be honest with you.

1 Like
4

The green light/ red light im referring to is the forex price indicator on the CMC app that shows you when a currency is rising or lowering…

According to baby pipsin a currency pair EUR/USD, where the USD is weak you buy EUR, but the EUR/USD is red in the app which means the USD is weak right? Why am I buying if its red?

And wouldn’t I just buy USD/EUR? Why are there opposite pairs like USD/EUR, EUR/USD would you just short or long one currency pair?

Tbh I think if I’m struggling this much starting out this may not be for me…

5

Thanks man. Well I choose forex because it was the first one I started out on. I’ve haven’t really looked at stocks, but according to Babypips there more money in forex than stocks right? I’m looking more to trade as I want money here and now than long term investing tbh.

It seems trading and investing looks promising on the outside but inside it’s very confusing,

The bid/ask colour display on CMC (a spreadbetting and CFD broker app) displays red/green. The confusion though is my understanding of the concepts I read in the BP course that says buy when the EUR/USD is weak. On the app its displayed red indicating the USD is down against the EUR right? BP says buy…why am I buying a pair that is red?

6

I traded both. I started with stocks (invested and then traded) and was successful.

My psychology was not yet developed for the markets though and forex is a different beast. Stocks were easier for me. Liquidity was never an issue, even though I moved the market with my orders hahah.

My phone is going crazy right now so I can’t test the app. What I can tell you is:

Some reasons why EUR/USD will go up (you buy or go long for the purposes of this example):

-EUR fundamentals is more bullish than USD and USD is neutral.
-EUR is neutral/weak but USD is weaker.
-EUR and USD have both bullish fundamentals but EUR is stronger

So in the example you presented, basically if USD is weaker than EUR, EUR/USD goes up. That’s why you buy when you believe the USD is weaker. When you go long (buy) you’re essentially buying Euros and selling USD (to explain to you as simply as I can).

Now, when you throw the app colors in the mix, when the color is red that means USD is stronger than EUR in that instance only. That doesn’t mean you should sell EURUSD if the app color is red and buy when it is green. There’s more to it than that.

Don’t panic, just observe the charts and give it time. If all else fails, try the stock market. More money in forex, that’s true, but that doesn’t mean you cant make serious money in stocks.

Since you are fooling with CMC, maybe you are in NZ or Australia. In that case there will be less money (liquidity) than compared to U.S. stocks–so you could stay up late trading U.S. stocks or you could learn to trade the ASX index.

I’m sure you have a ton of questions by now :slight_smile:

Hope this makes sense. Gotta go fix my phone.

P.S. Trading has a higher difficulty than investing. Especially is you day trade.

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7

Normally these apps turn red if the currency is going down. Therefore that would mean eurusd is going down, ie eur is weak, usd is strong. Please re read this again. However you can not use an app colour to determine is a currency is strong or not. How do you know it’s because eur is weak or usd is strong. Maybe eur is normal but usd got stronger or usd is normal but eur got weaker. Just because one is weak does not mean the other is strong, it’s just stronger relative to the other currency. 1 + 1 is not equal to 2.

You can not use this colour change to trade the market reliably. Do you know how many people would have already tried this? There are so many currency heat maps out there. It’s not that easy.

Yeh you could buy usdeur instead of selling eurusd. Some brokers might offer it, my broker doesnt. Just make sure the spread is the same. Sometimes you might get an opposite pair like that, it works out because the opposite sometimes requires less leverage to trade it.

If you short one and long the other then you are basically breakeven. If one goes up then other goes down. You might try to close one quickly then let the other run but thers no guarantee it will run it might reverse. Secondly, you’ll be breakeven but you’ve paid the speed or commissions in both. So you’ll be losing money in the long run.

I dont have cmc so maybe screenshot what you’re looking at.