Forex is the biggest and most fluid market in the world trading approximately $2 trillion every day. The Foreign exchange marketplace is a cash interbank/interdealer marketplace. In simplest terms, this means the currencies traded in the Foreign exchange market are traded directly between banks, foreign currency dealers and Forex traders. Trade flows are an important cause in the long-term direction of a currency's exchange rate.
The Forex marketplace is not a traditional "market" due to the fact that there is no centralized bank for Forex trading activity and, therefore, trades placed in the Foreign exchange market are considered over-the-counter (OTC). Foreign exchange trading between parties occurs through computer terminals, exchanges and over telephones at thousands of banks worldwide. Clients can trade through online Foreign exchange trading platforms and/or over the telephone directly with a Foreign exchange broker on our trading desk. Due to the over-the-counter (OTC) nature of currency markets, there are a number of interconnected marketplaces, where different currency instruments are bought and sold.
Until recently the Foreign exchange market has not been available to the small trader. The large-scale bare minimum foreign currency transaction sizes and financial contributions left this marketplace open only to banks, major foreign currency dealers and the occasional large-scale Foreign exchange speculator. Now, with the option to control large positions with a relatively small amount of capital (margin), the Forex market is now more fluid than ever and available to most investors.
Five major currencies dominate trading in the Foreign exchange marketplaces: the U.S. Dollar, Euro, Japanese Yen, Swiss Franc and British Pound. The foreign currencies are traded in pairs in the Forex spot market. For instance, buying the EUR/USD in the Foreign exchange spot marketplace simply means the purchaser is buying the Euro and selling the U.S. Dollar in anticipation of the Euro gaining value in comparison to the U.S. Dollar. Likewise, the seller of a EUR/USD contract would be selling the Euro against the U.S. Dollar.
Over the past twenty years, an escalation in international trade and foreign investment has made the economies of the world more interconnected. New opportunities for traders have been created with the dramatic economic growth of the Asian and Latin American economies. Today, supply and demand for a specific currency is the driving factor in determining exchange rates. Other factors such as routinely reported economic figures and unpredicted news reports, such as disasters or political instabilities, could also alter the desirability of holding a particular currency, thus determing international supply and demand for that currency.
Monday, March 31, 2008
Thursday, March 27, 2008
Forex - Economic Factors
Government budget deficits or surpluses: The marketplace usually reacts negatively to widening government budget deficits, and positively to narrowing budget deficits. Interest rate news has a direct impact on the international financial markets. Reports released by the government that detail a country’s economic performance are economic indicators.
Although currencies do not have an annual growing season like physical commodities, business cycles do make themselves felt. The Forex can be broken up into three major trading sessions: the Tokyo Session, the London Session, and the U.S. Session.
Economic reports such as those on unemployment numbers and housing statistics are used as fundamental indicators.
There are other economic indicators that can be used to evaluate the fundamentals of the Forex. There is little or no 'inside information' in the forex markets. The retail sales report measures the total receipts of all retail stores in a given country. The duration of the trade can be a few days, months or years.
A broker, in the forex market, is any person or firm that charges a fee in exchange for executing trades for a trader. Different dealers offer very different deals to their customers. A forex broker does not charge a commission for placing a buy or a sell order the way a real estate broker would charge a percentage fee of the total price of a sale. A forex broker is paid according to the spread or the difference between the traders bid for a currency, and the sellers asking price for that currency.
When you are doing your research of the brokers, check to see what kind of trading tools and analysis data they are offering. Other traders study price charts in order to identify such patterns.
"FX" is an abbreviation of "foreign exchange" or "forex". In the foreign exchange market and international finance, a world currency or global currency refers to a currency in which the vast majority of international transactions take place and which serves as the world's primary reserve currency. Although exchange rates are affected by many causes, in the end, currency prices are a result of supply and demand forces.
No other marketplace encompasses (and distills) as much of what is going on in the world at any given time as foreign exchange. Traders of forex commonly favor forex trading systems. The forex market is a worldwide marketplace and according to some estimates is almost as big as thirty times the turnover of the US Equity markets.
Although currencies do not have an annual growing season like physical commodities, business cycles do make themselves felt. The Forex can be broken up into three major trading sessions: the Tokyo Session, the London Session, and the U.S. Session.
Economic reports such as those on unemployment numbers and housing statistics are used as fundamental indicators.
There are other economic indicators that can be used to evaluate the fundamentals of the Forex. There is little or no 'inside information' in the forex markets. The retail sales report measures the total receipts of all retail stores in a given country. The duration of the trade can be a few days, months or years.
A broker, in the forex market, is any person or firm that charges a fee in exchange for executing trades for a trader. Different dealers offer very different deals to their customers. A forex broker does not charge a commission for placing a buy or a sell order the way a real estate broker would charge a percentage fee of the total price of a sale. A forex broker is paid according to the spread or the difference between the traders bid for a currency, and the sellers asking price for that currency.
When you are doing your research of the brokers, check to see what kind of trading tools and analysis data they are offering. Other traders study price charts in order to identify such patterns.
"FX" is an abbreviation of "foreign exchange" or "forex". In the foreign exchange market and international finance, a world currency or global currency refers to a currency in which the vast majority of international transactions take place and which serves as the world's primary reserve currency. Although exchange rates are affected by many causes, in the end, currency prices are a result of supply and demand forces.
No other marketplace encompasses (and distills) as much of what is going on in the world at any given time as foreign exchange. Traders of forex commonly favor forex trading systems. The forex market is a worldwide marketplace and according to some estimates is almost as big as thirty times the turnover of the US Equity markets.
Tuesday, March 25, 2008
Forex Trading - Economic Conditions
Surpluses and deficits in trade of goods and services reflect the competitiveness of a nation's economy. Just like in the stock market, better returns are provided by country’s that demonstrate faster economic growth and better economic conditions compared to other countries. There is the potential for profit in the currencies marketplace regardless of which way the market moves. Interest rate news has a direct impact on the international financial markets.
Although exchange rates are affected by many causes, in the end, currency prices are a result of supply and demand forces. Reports released by the government that detail a country’s economic performance are economic indicators. If you are trading in the United States, make sure your Foreign exchange brokerage firm is registered with Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). Economic reports such as those on unemployment numbers and housing statistics are used as fundamental indicators.
The Foreign exchange Marketplace better known as Foreign exchange - is a world wide marketplace for buying and selling currencies. Generally, the more healthy and robust a country's economy, the better its currency will perform, and the more demand for it there will be. A market order is an order to buy or sell at the current market price. The diverse selection of execution venues such as internet trading platforms has also made it easier for retail traders to trade in the forex marketplace.
Different dealers offer very different deals to their customers. A Foreign exchange broker is paid according to the spread or the difference between the traders bid for a currency, and the sellers asking price for that currency. A broker is any person or firm that charges a fee in exchange for executing trades for a trader. A Forex broker does not charge a commission for placing a buy or a sell order the way a real estate broker would charge a percentage fee of the total price of a sale.
If you’re looking for the best days of the week to trade try Tuesdays and Wednesdays because these are the busiest days for trading. Forex trading starts on Sunday at 5:00 p.m. eastern standard time (EST). A couple of hours later, the Tokyo market opens. The forex is a 24-hour market.
Closing your open positions will prevent your account from falling into a negative balance. Increasing interest rates are usually bad news for the stock markets but could be good news for the forex trader. It is difficult to determine what type of an impact a rate change will have in the marketplace.
As in the stock market, any deviation from the norm can cause large price and volume movements. Depending on your market position, an investor always has the opportunity to profit in a fluctuating market because Forex trading involves selling one currency to buy another. The Forex can be broken up into three major trading sessions: the Tokyo Session, the London Session, and the U.S. Session. The average daily trade in the global forex and related markets currently is over US$ 3 trillion.
Economic policy comprises government fiscal policy (budget/spending practices) and monetary policy (the means by which a government's central bank influences the supply and "cost" of money, which is reflected by the level of interest rates). Fundamental analysis in the Forex is the economic conditions and the affect those conditions have on a nation’s currency. Also, events in one country in a region may spur positive or negative interest in a neighboring country and, in the process, affect its currency.
Although trading in the euro has grown considerably since the currency's creation in January 1999, the foreign exchange market is thus far still largely dollar-centered.
Although exchange rates are affected by many causes, in the end, currency prices are a result of supply and demand forces. Reports released by the government that detail a country’s economic performance are economic indicators. If you are trading in the United States, make sure your Foreign exchange brokerage firm is registered with Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). Economic reports such as those on unemployment numbers and housing statistics are used as fundamental indicators.
The Foreign exchange Marketplace better known as Foreign exchange - is a world wide marketplace for buying and selling currencies. Generally, the more healthy and robust a country's economy, the better its currency will perform, and the more demand for it there will be. A market order is an order to buy or sell at the current market price. The diverse selection of execution venues such as internet trading platforms has also made it easier for retail traders to trade in the forex marketplace.
Different dealers offer very different deals to their customers. A Foreign exchange broker is paid according to the spread or the difference between the traders bid for a currency, and the sellers asking price for that currency. A broker is any person or firm that charges a fee in exchange for executing trades for a trader. A Forex broker does not charge a commission for placing a buy or a sell order the way a real estate broker would charge a percentage fee of the total price of a sale.
If you’re looking for the best days of the week to trade try Tuesdays and Wednesdays because these are the busiest days for trading. Forex trading starts on Sunday at 5:00 p.m. eastern standard time (EST). A couple of hours later, the Tokyo market opens. The forex is a 24-hour market.
Closing your open positions will prevent your account from falling into a negative balance. Increasing interest rates are usually bad news for the stock markets but could be good news for the forex trader. It is difficult to determine what type of an impact a rate change will have in the marketplace.
As in the stock market, any deviation from the norm can cause large price and volume movements. Depending on your market position, an investor always has the opportunity to profit in a fluctuating market because Forex trading involves selling one currency to buy another. The Forex can be broken up into three major trading sessions: the Tokyo Session, the London Session, and the U.S. Session. The average daily trade in the global forex and related markets currently is over US$ 3 trillion.
Economic policy comprises government fiscal policy (budget/spending practices) and monetary policy (the means by which a government's central bank influences the supply and "cost" of money, which is reflected by the level of interest rates). Fundamental analysis in the Forex is the economic conditions and the affect those conditions have on a nation’s currency. Also, events in one country in a region may spur positive or negative interest in a neighboring country and, in the process, affect its currency.
Although trading in the euro has grown considerably since the currency's creation in January 1999, the foreign exchange market is thus far still largely dollar-centered.
Wednesday, March 19, 2008
Forex Investing
Foreign exchange investing involves buying and selling different currencies. It works on a theory that is similar to the stock market. As we know that to make a profit, you have to buy at a lower price and sell at a higher price, or we can also sell at a higher price first and buy at a lower price. By analyzing demand conditions, you can actually make a profit in foreign exchange. All you have to do is analyze the foreign exchange in the correct way and make the correct trade.
Why to go for Forex trading?
You have the option to invest in the stock market, but here are a few important advantages of currency investing over the stock marketplace.
24-hour trading
Foreign exchange investing is done on a 24-hours basis. The Foreign exchange market is open most of the day and night because one market or the other is open, with the exception of weekends. Traders involved in the foreign exchange trading game plan can get first hand knowledge by viewing the world news or charting a country's economic health and than act accordingly.
The currency rate is an electronic transaction involving a network of banks 24 hours a day from 00:00 GMT on Monday until 10:00 pm GMT on Friday.
Greater Liquidity
There is superior liquidity in the foreign exchange marketplace as there are always traders to buy and sell foreign currencies. The foreign exchange trading market is 50 times bigger than the New York Stock Exchange and liquidity of such a large market ensures price consistency.
Foreign exchange trading makes investing more fluid and permits foreign exchange investors to take part in investing opportunities as they happen throughout the day rather than waiting for the market to open the next day.
High Control in forex trading
100 to 1 leverage is frequently available from online foreign exchange brokers, which substantially exceeds the common 2:1 margin offered by brokers in the stock market. This gives Foreign exchange investors a huge control in their investing and presents the potential for extraordinary profits with relative small investments. Leverage can also go the opposite way and may lead you to huge losses if you are not careful.
Foreign exchange investing transactions have no commissions. Forex brokers can earn money by fixing their own speculation between what a currency could be bought at and what it could be sold at. The foreign exchange marketplace is so large that no one individual, bank, fund or government body can influence it for a long period of time.
There are certain trading indices that give indications to which way the demand is moving and therefore giving the investor a heads up on which way to trade. These foreign exchange indices are delivered by email, instant messenger or direct to your desktop. Some forex brokers even offer auto-trading, allowing you to auto-execute the investing indices direct into your broker account.
Why to go for Forex trading?
You have the option to invest in the stock market, but here are a few important advantages of currency investing over the stock marketplace.
24-hour trading
Foreign exchange investing is done on a 24-hours basis. The Foreign exchange market is open most of the day and night because one market or the other is open, with the exception of weekends. Traders involved in the foreign exchange trading game plan can get first hand knowledge by viewing the world news or charting a country's economic health and than act accordingly.
The currency rate is an electronic transaction involving a network of banks 24 hours a day from 00:00 GMT on Monday until 10:00 pm GMT on Friday.
Greater Liquidity
There is superior liquidity in the foreign exchange marketplace as there are always traders to buy and sell foreign currencies. The foreign exchange trading market is 50 times bigger than the New York Stock Exchange and liquidity of such a large market ensures price consistency.
Foreign exchange trading makes investing more fluid and permits foreign exchange investors to take part in investing opportunities as they happen throughout the day rather than waiting for the market to open the next day.
High Control in forex trading
100 to 1 leverage is frequently available from online foreign exchange brokers, which substantially exceeds the common 2:1 margin offered by brokers in the stock market. This gives Foreign exchange investors a huge control in their investing and presents the potential for extraordinary profits with relative small investments. Leverage can also go the opposite way and may lead you to huge losses if you are not careful.
Foreign exchange investing transactions have no commissions. Forex brokers can earn money by fixing their own speculation between what a currency could be bought at and what it could be sold at. The foreign exchange marketplace is so large that no one individual, bank, fund or government body can influence it for a long period of time.
There are certain trading indices that give indications to which way the demand is moving and therefore giving the investor a heads up on which way to trade. These foreign exchange indices are delivered by email, instant messenger or direct to your desktop. Some forex brokers even offer auto-trading, allowing you to auto-execute the investing indices direct into your broker account.
Saturday, March 8, 2008
Forex - Currency Pairs
When you think of a pair, it usually consists of two things: a pair of shoes or a pair of tickets...two shoes or two tickets. With a currency pair, there are two currencies.
In the Forex market, a currency pair consists of a "base" currency (the first currency in the pair) and a "cross" currency (the second currency in the pair) and is displayed as a symbol. For example, the symbol EUR/USD is for the Euro/US dollar. In this example, the Euro is the "base" currency and the US dollar is the "cross" currency.
In the Forex, there are six major currency pairs. They are:
EUR/USD - Euro/US Dollar
GBP/USD - Great British Pound/US Dollar
USD/CHF - US Dollar/Swiss Franc
USD/JPY - US Dollar/Japanese Yen
AUD/USD - Australian Dollar/US Dollar
USD/CAD - US Dollar/Canadian Dollar
The Forex revolves around the exchange rates between the two currencies in the pair. These exchange rates change from day to day, minute to minute, even second to second and these price fluctuations create a market.
Currency traders buy a currency if they think the price will go up and they sell a currency if they think the price will go down. Without a software program or extensive training in the Forex market, most people are basically guessing which way the price will move. Some people have more sophisticated methods of guessing, but it is still guessing.
Learn the risk of investing in the Forex market before you open a live account and fund it with your money.
In the Forex market, a currency pair consists of a "base" currency (the first currency in the pair) and a "cross" currency (the second currency in the pair) and is displayed as a symbol. For example, the symbol EUR/USD is for the Euro/US dollar. In this example, the Euro is the "base" currency and the US dollar is the "cross" currency.
In the Forex, there are six major currency pairs. They are:
EUR/USD - Euro/US Dollar
GBP/USD - Great British Pound/US Dollar
USD/CHF - US Dollar/Swiss Franc
USD/JPY - US Dollar/Japanese Yen
AUD/USD - Australian Dollar/US Dollar
USD/CAD - US Dollar/Canadian Dollar
The Forex revolves around the exchange rates between the two currencies in the pair. These exchange rates change from day to day, minute to minute, even second to second and these price fluctuations create a market.
Currency traders buy a currency if they think the price will go up and they sell a currency if they think the price will go down. Without a software program or extensive training in the Forex market, most people are basically guessing which way the price will move. Some people have more sophisticated methods of guessing, but it is still guessing.
Learn the risk of investing in the Forex market before you open a live account and fund it with your money.
Thursday, March 6, 2008
Forex - Reports and Brokers
Economic reports such as those on unemployment numbers and housing statistics are used as fundamental indicators. The Forex market is the deepest, largest and most fluid market for options of any kind in the world. When a country raises its interest rate, that country’s currency strengthens relative to other currencies. The levels of access that make up the forex market are determined by the size of the “line” or in other words, the amount of money with which they are trading. The Forex market was established in 1971 with the abolishment of fixed currency exchanges.
Many individuals consider the Foreign exchange market risky. Surpluses and deficits in trade of goods and services reflect the competitiveness of a nation's economy. Different brokers offer very different deals to their customers. Research the broker that you want to trade with prior to opening a live account.
A broker is any person or firm that charges a fee in exchange for executing trades for a trader. A Foreign exchange broker does not charge a commission for placing a buy or a sell order the way a real estate broker would charge a percentage fee of the total price of a sale. A Forex broker is paid according to the spread or the difference between the traders bid for a currency, and the sellers asking price for that currency.
If you’re looking for the best days of the week to trade try Tuesdays and Wednesdays because these are the busiest days for trading. Forex trading starts on Sunday at 5:00 p.m. Eastern Standard Time (EST). There are two markets open at the same time.
Increasing interest rates are usually bad news for the stock markets but can be very good news on the Forex market depending on which currencies you are trading.
Different Forex brokers will offer different trading suggestions and tools. Major news is released publicly, often on scheduled dates, so many people have access to the same news at the same time. The foreign exchange marketplace is a worldwide market and according to some estimates is almost as big as thirty times the turnover of the US Equity markets.
Fundamental analysis in the Foreign exchange is the economic conditions and the affect those conditions have on a nation’s currency. Forex has no central marketplace for traders and no standard in foreign currency exchanges. Depending on your market position, an investor always has the opportunity to profit in a fluctuating marketplace because Foreign exchange trading involves selling one currency to buy another. Technical analysis in the Foreign exchange is that price is assumed to reflect all news and the charts provided by the brokers are the objects of analysis.
There is no unified or centrally cleared marketplace for the majority of Forex trades, and there is very little cross-border regulation. Supply and demand for any given currency, and thus its value, are not influenced by any single element, but rather by a number.
If you would like to participate in the Forex market, learn to manage the risks involved.
Many individuals consider the Foreign exchange market risky. Surpluses and deficits in trade of goods and services reflect the competitiveness of a nation's economy. Different brokers offer very different deals to their customers. Research the broker that you want to trade with prior to opening a live account.
A broker is any person or firm that charges a fee in exchange for executing trades for a trader. A Foreign exchange broker does not charge a commission for placing a buy or a sell order the way a real estate broker would charge a percentage fee of the total price of a sale. A Forex broker is paid according to the spread or the difference between the traders bid for a currency, and the sellers asking price for that currency.
If you’re looking for the best days of the week to trade try Tuesdays and Wednesdays because these are the busiest days for trading. Forex trading starts on Sunday at 5:00 p.m. Eastern Standard Time (EST). There are two markets open at the same time.
Increasing interest rates are usually bad news for the stock markets but can be very good news on the Forex market depending on which currencies you are trading.
Different Forex brokers will offer different trading suggestions and tools. Major news is released publicly, often on scheduled dates, so many people have access to the same news at the same time. The foreign exchange marketplace is a worldwide market and according to some estimates is almost as big as thirty times the turnover of the US Equity markets.
Fundamental analysis in the Foreign exchange is the economic conditions and the affect those conditions have on a nation’s currency. Forex has no central marketplace for traders and no standard in foreign currency exchanges. Depending on your market position, an investor always has the opportunity to profit in a fluctuating marketplace because Foreign exchange trading involves selling one currency to buy another. Technical analysis in the Foreign exchange is that price is assumed to reflect all news and the charts provided by the brokers are the objects of analysis.
There is no unified or centrally cleared marketplace for the majority of Forex trades, and there is very little cross-border regulation. Supply and demand for any given currency, and thus its value, are not influenced by any single element, but rather by a number.
If you would like to participate in the Forex market, learn to manage the risks involved.
Saturday, March 1, 2008
Forex - Hours and Brokers
If you’re looking for the best days of the week to trade in the Forex market try Tuesdays and Wednesdays because these are the busiest days for trading. Most of the daily trading volume occurs during 3am EST and 11am EST because that's when the London session is open and that is currently the biggest trading session.
Technical analysis in the Foreign exchange is that price is assumed to reflect all news and the charts provided by the brokers are the objects of analysis. The Forex market has become a popular work from home business for many. Interest rates and the strength of a country's economy are the two primary factors that determine the availability of a currency.
Only choose a Forex broker that has the best and most up to date Foreign exchange tools at his fingertips. All the broker companies require you to invest an initial sum of money. A Foreign exchange broker is paid according to the spread or the difference between the traders bid for a currency, and the sellers asking price for that currency.
There is little or no 'inside information' in the foreign exchange markets. Getting started in Forex trading involves learning two different ways of Forex trading (technical and fundamental) and becoming as efficient as you possibly can in the Forex trading strategy that works best for you. Remember that economic indicators gauge a country’s economic state, changes in the conditions reported will directly affect the price and volume of a country’s currency.
Technical analysis in the Foreign exchange is that price is assumed to reflect all news and the charts provided by the brokers are the objects of analysis. The Forex market has become a popular work from home business for many. Interest rates and the strength of a country's economy are the two primary factors that determine the availability of a currency.
Only choose a Forex broker that has the best and most up to date Foreign exchange tools at his fingertips. All the broker companies require you to invest an initial sum of money. A Foreign exchange broker is paid according to the spread or the difference between the traders bid for a currency, and the sellers asking price for that currency.
There is little or no 'inside information' in the foreign exchange markets. Getting started in Forex trading involves learning two different ways of Forex trading (technical and fundamental) and becoming as efficient as you possibly can in the Forex trading strategy that works best for you. Remember that economic indicators gauge a country’s economic state, changes in the conditions reported will directly affect the price and volume of a country’s currency.
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