Forex Trading Guide |
|
| Forex Profits by Anthony Trister The Forex Market—What, When and Why?Forex, FX and the Forex market are some common abbreviations for the Foreign Exchange market. Actually it is the largest financial market in the world, where money is sold and bought freely. In its present condition the Forex market was launched in the seventies, when free exchange rates were introduced, and only the participants of the market determine the price of one currency against the other proceeding from demand and supply. As far as the freedom from any external control and free competition are concerned, the Forex market is a perfect market.With a daily turnover of over trillions of dollars, the Foreign Exchange market conducts more than three times the aggregate amount volume of the United States Equity and Treasury markets combined. The Forex market is an over-the-counter market where buyers and sellers conduct foreign exchange business using different means of communication.Unlike other financial markets, the Forex market has no physical location or central exchange. Since the Forex market lacks a physical exchange, the market trades continuously on a 24-hour basis, moving from one time zone to the next, across each of the world’s major financial centers every day. Trillions of dollars of foreign exchange activity takes place every day. From 1997 to the end of 2000, daily forex trading volume surged approximately from US$5 billion to US$1.5 trillion and more (according to various recent studies it has touched $1.7 trillion per day and dwarfs all other markets for trading in size and volume). It is really difficult, if not impossible; to determine an absolutely exact number because trading is not centralized on an exchange. But one thing is for sure that the Forex market continues to grow at a phenomenal rate.Before the advent of Internet and ecommerce, only big corporations, multinational banks and wealthy individuals could trade currencies in the Forex market through the use of the proprietary trading systems of banks. These systems required as much as US$1 million to open an account. Thanks to advancements in online technology, today investors with only a few thousand dollars can have access to the Forex market 24 hours a day and around 5 ½ days of a week.The Forex market is a nonstop cash market where currencies of nations are traded, typically via brokers called forex brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets while traders increase or decrease value of an investment upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events so it is also considered to be a highly volatile and fragile market too. Conditions of the Forex market never remain the same they changes every second.The foreign exchange market dwarfs the combined operations of the New York, London, and Tokyo futures and stock exchanges. According to its size and scope it is many times larger than all other markets. Stats shows that spot transactions and forward outright Forex trading take place in the inter-bank market. 51% of the market is in spot Forex transactions, followed by 32% in currency swap transactions. Forward outright Forex transactions represent another 5% of this daily turnover, with options on ‘interbank’ Forex transactions making up another 8%. Therefore the inter-bank market accounts for 96% of the global foreign exchange market, with the remaining 4% being divided among all the global futures exchanges.For traders, Forex trading provides an alternative to stock market trading. While there are thousands of stocks to choose from, there are only a few major currencies to trade (the Dollar, Yen, British Pound, Swiss Franc, and the Euro are the most popular). Forex trading also provides a lot more leverage than stock trading, and the minimum investment to get started is a lot lower. Add to that the ability to choose flexible trading hours (forex trading goes on 24 hours a day) and you have the reason why so many stock traders have flocked to day trade currencies. About the Author Anthony Trister is a currency trader and is an owner of OneDayTrades which offers free, mechanical forex signals and an automated trading program for those wanting to trade forex. Free access available here: http://www.onedaytrades.com |
| Online Forex by Rafik Patel Online Forex Rafik Patel Q1: When you consider that the foreign exchange market has become the worlds largest financial market, with over $1.5 trillion USD traded daily, where does it go from here A1:The FX market is unique, in the UK there is no central exchange, we trade via the inter bank market. With more and more private individuals taking up margin trading and new forex brokers setting up, I can only see the market grow in the near future. Q2: Other than great liquidity, what are the principal benefits attached to the forex market A2: There is less to consider when trading the forex markets, there are only a number of variables that affect the pricing. Main advantages include Forex Market allows 24 hour trading Greater leverage - with most brokers offering 100 – 1, Less starting capital required, More Liquidity - day trading has to have enough volume to make it worth our while. The currency market is more liquid than all the world stock markets put together. Currencies are always in action, Free trading systems Better for shorting - There are artificial controls built into the market to prevent it from going down too fast. The reason is that we live in a biased world that likes to see things go up instead of down. One of these artificial contraptions is the "uptick rule," which comes into play when shorting stocks, making it more difficult to sell a stock short than to buy it. This is unheard of in the currency market. Selling currencies short while day trading is just as easy as buying them. Ideal for Short Term Traders - Q3: Limited market access, liquidity issues-after market hours, commission fees, capital requirements and short selling/stop restrictions are just some of the issues investors face when considering other markets. Given that the forex market removes many of these traditional barriers and therefore does not restrict the forex traders ability to make a trade at the right time, are we likely to see an increase in trading volumes this year A3: With all these advantages, traders are finding it hard not to trade currencies, online trading volumes across all products is increasing at a substantial rate, however FX trading, predominantly amongst retail investors is becoming very popular. Q4: There is stiff competition amongst online forex service providers for retail forex traders with some claiming to offer the same degree of technical analysis enjoyed by the worlds largest banks and institutional traders. Is this possible A4: Technical Analysis has come a long way, more and more forex provides now have partnerships with firms who provide analysis. However the banks still have an advantage, the markets are still not under perfectly competitive economic model. The banks will always have access to information that is not readily available, ISX FX currently sources its information from a number of banks to fill this gap. Q5: Do you subscribe to the theory that forex is less volatile than stocks because the market is much deeper A5: As a bet on the direction of a national economy, no currency has ever dropped 25 percent in a day, or imploded as rapidly and completely as an Enron or a Parmalat. In the wake of those scandals, many companies are meting out information more cautiously, making it harder to get the real "scoop" on stocks one problem of trading with too-high leverage is that one piece of surprise news can wipe out ones capital. If you treat forex trading like a business, including proper money management, you have a better chance of success." Q6: U.S. interest rates-decade lows; global trade wars and terrorism fears have dominated the headlines recently. What impact has this had on retail volumes A6: The above factors have all led to a decline in the dollar. This coupled with tighter regulation of brokers has given investors more confidence in brokers. Also the stock market crash has driven individuals to look at the profit opportunities offered by forex. Q7: Stateside the Commodity Futures Trading Commission CFTC has brought 58 actions against firms, since its new powers were awarded in 2000. Given that certain brokers continue to abuse the system, with investor money sometimes not being traded in the markets promised. What can investors do protect themselves A7: The retail forex market is in essence betting, as with any bookmaker there is always a risk that you will not get your winnings, or the odds will be highly stacked against you. With tighter regulation and increased competition, this risk of default has largely disappeared. The risk of price manipulation still exists and this will never really go away. Investors need to ensure that they have an independent price source and trade with a broker who offers true one click dealing. Most brokers work on the basis of the law of large numbers, acting like the bucket shops of 50 years ago, they do not hedge any positions and are directly competing against there clients. This will always lead to price manipulation and further actions by authorities will inevitably be taken. Q8: What is this best way for “currency rookies” to get involved in the market A8: Like with any new form of trading you need to know what you are doing, especially as there is margin involved. Take all the time you need to learn this new trading skill well -- practice everything you learn with a demo account before you consider going live with your own money. Investors should read books, attend seminars and paper trade until they are comfortable with there strategy.
About The Author Rafik Patel C.E.O. ISX FX LIMITED. www.isxfx.com rafik@isxfx.com |
| A Beginner’s Guide To Forex by Mary McDowski FOREX is the abbreviation for the Foreign Exchange market. FOREX is basically an international exchange market where currencies from all over the world are bought and sold for profit. The market today began in the 1970’s. FOREX is a very unique market because it is not based in any particular place, and it also has very few qualifications for investing. FOREX is also free of external controls, and the investors (participants in the market) largely determine how much a currency is worth based on demand. Almost anyone can invest in FOREX, and there are strategies for investors who want to have long-term gains, and strategies for investors who desire short-term gains. The vast array of investors makes FOREX quite unique in the financial community. The Workings of FOREX FOREX is not centered at one place like the NYSE. The specific hours for FOREX trade are 24 hours a day from Sunday afternoon to Friday afternoon. FOREX transactions can take place at almost any time, anywhere, all over the world. There are FOREX dealers in almost all of the time zones, and it is simple to find them. Many dealers can be found online. All an investor does is decide what currency he or she wants to purchase, contact the dealer, and then makes the purchase. Many investors purchase using a credit line (money they do not have). This is called marginal trading. What is Marginal Trading? Marginal trading is a term used for trading with borrowed capital. FOREX investments can be made without actually having the money. All an investor needs to do is borrow the money for a certain currency. The investor wants to choose a currency that will increase in value quite rapidly. Once the currency increases, the investor pays back the money he or she borrowed and makes sheer profit. This is a high-risk investment, but the rewards are great (as with most high risk investments). Two Types of FOREX Analytics FOREX traders often have to analyze the market. Like all investments, FOREX involves a certain amount of calculated risk. Two ways to calculate these risks are though Technical Analysis and Fundamental Analysis. Technical Analysis is based on the idea that trends through history will continue. A FOREX investor will notice that a certain currency is very strong and seems to be rising at a normal rate. The same investor will also suppose that the currency will not decline in value, and will continue to rise, as it has done in the past. The investor then purchases a large amount of that currency and expects to make a profit. This investment entails a large assumption but is relatively safe. Fundamental Analysis is an analysis of an entire countries situation. Investors utilizing this technique look at the situation of the country in which the currency finds its base. Factors such as the countries economic status, political status, and global status are taken into account. For example, a Fundamental Analysis investor would not invest in currency from a country that just overthrew its leader and is in political shambles. Although this investment seems logical, it does not take into account one of the fundamental elements of FOREX trading. FOREX currency values are largely determined by the investors. That being said, Fundamental Analysis assumes that other FOREX traders will view a countries situation in the same way and respond accordingly. Benefits of FOREX FOREX can be very beneficial to a variety of people. FOREX trading can gain investors a large amount of money either over a long period of time, or in a short period of time. Investors who choose to invest in FOREX are generally well informed about the market and understand the current situations in many countries of the world. Investing in FOREX is simple and highly recommended for anyone who wants to enjoy profits from top-notch investments. About the Author: Mary McDowski is very interested in investments and finances. Learn more about FOREX at ( http://www.forexreader.com ). Source: www.isnare.com |
| A Look At Online Forex Brokers by Eddie Tobey An online forex broker is a firm that facilitates retail trading using Internet technologies. Global Forex Trading (GFT), one of the popular online forex brokers. It provides retail traders with a free demo trading account, allows users to open a live account, gives live help, provides software called DealBook FX 2, and allows viewing of account documents. (DealBook FX 2 can be downloaded for the demo trading account). Gain Capital Group’s Online Forex offers 200:1 leverage. In some cases, the total return on investment is higher due to leverage. For example, with $1000 cash in a margin account, the investor can control up to $200,000 in notional value. Of course, trading on leverage magnifies both the investor’s profits and losses. GCI Financial Ltd. offers commission-free online trading in forex. GCI offers Internet trading software, fast and efficient execution, and 0.5% margin requirements. This broker offers USD or Euro denominated trading accounts. The spreads are 3 pips in EUR/USD and USD/JPY, and are 4 to 5 pips for other major commissions. Clients can hedge by opening positions in the same currency in opposite directions. Risk to the investor is limited to the deposited funds. Market analysis and research, real-time charts, and forex trading signals are available at no charge. ACM, part of the REFCO group, offers 3 pip spreads on all major currencies, which works out to between 0.02% and 0.03% on the dollar value. They also offer commission-free trading, and forex trading with a 1% margin, which means that a trader can control $1,000,000 with $10,000 in his account. There are many online forex brokers that offer free demo accounts for potential forex traders to practice trading. It is only a matter of registering and starting demo trading to get a feel for forex trading. In addition, at most sites, traders can find free forex news to assist them with their trade strategies. About the Author: Forex Brokers provides detailed information on forex brokers, forex trading and market makers, and other forex-related topics. For more information go to http://www.e-forexbrokers.com and/or visit its sister site at http://www.e-incorporatinginflorida.com for related information. Source: www.isnare.com |
| Earn 72% Monthly Income On E-gold Deposits! Stable Income! by Dedra Allen Stop wasting your life working for nothing or very little! Invest a small amount in e-gold. Deposit and let the professional investors at Foreign Fund make it happen for you. Here is a stable starter investment account! The admin at Foreign fund have years of experience in forex trading, and very lucrative offshore investments. Insured accounts are also available. Honest christian, and trustworthy administration. Why slave for years with nothing to leave you family? This is not what God intended for his people. Open your eyes today.This is very easy to use, and you don't need to know a thing about investing! It is all done for you! If you need egold, I recommend Gold-Traders.com. They sell a minimum of $25 egold for only $28.75! This is the lowest on the net and they take paypal!Make sure to use the in exhange, this deposits to your egold account. They will even match your initial $10 egold deposit to get started! Details below!You will be given $10 free, yes $10 FREE!! When you make your first deposit we’ll add $10 FREE. Try it to believe it. Go ahead, get started! Then you Decide what you want to DO!! Here are the links: Get an egold account first if you don't have one: https://www.e-gold.com/egold.asp?cid=827297Remember all your login info., and now create your new Foreign Fund account: Do NOT use spaces for your logon ID and remember that egold account # is different from Foreign Fund account.http://foreign-fund.com/index.php?ref=DEDRAOpen your account and deposit $10 e-gold. $10 additional deposit will appear automatically!! Just access link on the word "REGISTER" , under the login name fields on the homepage of foreign Fund. This will open your signup page! You have to set your account to "COMPOUND" when you open it. And choose to rollover your interests to be added automatically to your investment amount (compounding) every month. Be SURE to set your account to "COMPOUND" when you open it!! Then , leave it in your account, and watch it grow! In a Compounding plan, you're paid a daily simple interest 2% (60% monthly up to 100%) and will be 72%, and you can withdraw your interests on a monthly basis or roll over your interests. While in a Non-Compounding plan, you're paid a daily simple interest 1% (30% up to 46%) and you can withdraw your interests on a daily basis (every day), Let's watch your $10 deposit with your $10 bonus: 1----- 20 ($10 plus bonus $10 credited instantly) 2 ------323------ 51.24------ 81.925 -----131.076---- 209.717---- 335.548---- 536.879----- 858.9910--- 1,374.3811--- 2,199.0212-- 3,518.43Calculating your compounding income can be done by multiplying your investment amount by 1.6 (min. 60%), then taking the result and multiply it by 1.6 and a total of multiplications equal to the number of compounding months (keeping in mind that your interests compound on a monthly basis), I can go on and on here! In January 2004 for the compound account it will be 72% monthly and for the non compound account it will be 42% monthly. Approx. 77% in February. If you need a great paid to click and surf that pays monthly ontime, generates tons of quality visits and pays out in egold, stormpay, or paypal Join Surf4more! Get 5,000 free credits to join for FREE!Here is the link:http://surf4more.com//signup.php?ref=552Want 100,000 hits for $1.99? Grab this quick!http://www.redrockgrandhits.us/signup.php?ref=24Enjoy All Your Fantastic Profits!Dedra AllenNeed Egold Daily? Invest here! Please put referred by #827297 in the memo line when signing up, so I get my referral bonus! This is how you get yours too!http://rip.biz.ly/ About the Author Dedra Allen --Is a former fortune 500 corporate executive. Accomplished business woman, publisher and author, with an extensive backgound in businsess and public relations. She so is a futuristic thinker with deeply chrisitian values and inspirations.She wishes for all to experience true prosperity and the freedom that comes with it. |
| Forex Brokers by Simon Harris Most FOREX traders use a broker to handle their transactions. What exactly is a broker? Strictly speaking, a broker is an individual or a company that buys and sells orders according the investor's decisions. Brokers earn money by charging a commission or a fee for their services. A FOREX broker needs to be associated with a large financial institution such as a bank in order to provide the funds necessary for margin trading. In the United States a broker should be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) as protection against fraud and abusive trade practices. Before trading FOREX you need to set up an account with a FOREX broker. You may feel overwhelmed by the number of brokers who offer their services online. Deciding on a broker requires a little bit of research on your part, but the time spent will give you insight into the services that are available and fees charged by various brokers. The best advertising is word-of-mouth advertising, and this is just as valid in FOREX trading as it is for any other type of business. Talk to friends and associates to see who they are dealing with and find if they have any complaints or difficulties in dealing with a particular broker. You could try selecting a few online brokers and contact their Internet help desks to see how quickly they respond to enquiries and whether or not they answer questions to your satisfaction. Keep in mind, however, that pre-sales service may be better than after sales service. This can be true for any online business, not just FOREX brokers. Customer satisfaction and safety are just part of the story. You want to find a broker who executes orders quickly and with minimum slippage. All online brokers should offer automatic execution and have clear policies regarding slippage. They should be able to tell you how much slippage can be expected in both normal and fast-moving markets. Next you want to know the fees involved. What is the spread? Is spread fixed or variable according to the type of account? Are mini accounts subject to wider spreads? Are there any other charges? Smaller spreads mean more profit for the trader, but there may be a trade-off between spread and service. Look at the overall picture before deciding to go with a particular broker. Margin accounts are the lifeblood of FOREX trading, so be sure you understand the broker's margin terms before setting up an account. You need to know the margin requirements and how margin is calculated. Does margin change according to the currency traded? Is it the same every day of the week? Some brokers may offer different margins for mini and standard accounts. Trading software is very important for the online FOREX trader. Get a feel for the options that are available by trying out a demo account at a few online brokers. Above all, you are looking for reliability and the ability to perform well in fast-moving markets. The software should offer automatic trading and may have special features such as trailing stops and trading from the chart. Some features may only be available at an extra cost, so be sure you understand what your trading needs are and how much the broker charges to provide them. Other information to find out about includes the broker's policy regarding minimum account balances, interest payments on account balances, which currencies can be traded and whether or not non-standard sized lots can be traded. You should also find out whether clients' funds are insured and the extent of that insurance. About The Author: This article provided courtesy of http://www.about-forex.net Copyright Simon Harris - http://www.about-forex.net |
| Forex Glossary by Norman Fleming Here are some of the most common terms used in FOREX trading. Ask Price – Sometimes called the Offer Price, this is the market price for traders to buy currencies. Ask Prices are shown on the right side of a quote – e.g. EUR/USD 1.1965 / 68 – means that one euro can be bought for 1.1968 UD dollars. Bar Chart – A type of chart used in Technical Analysis. Each time division on the chart is displayed as a vertical bar which show the following information – the top of the bar is the high price, the bottom of the bar is the low price, the horizontal line on the left of the bar shows the opening price and the horizontal line on the right of bar shows the closing price. Base Currency – is the first currency in a currency pair. A quote shows how much the base currency is worth in the quote (second) currency. For example, in the quote - USD/JPY 112.13 – US dollars are the base currency, with 1 US dollar being worth 112.13 Japanese yen. Bid Price – is the price a trader can sell currencies. The Bid Price is shown on the left side of a quote - e.g. EUR/USD 1.1965 / 68 – means that one euro can be sold for 1.1965 UD dollars. Bid/Ask Spread – is the difference between the bid price and the ask price in any currency quotation. The spread represents the broker's fee, and varies from broker to broker. Broker – the intermediary between buyer and seller. Most FOREX brokers are associated with large financial institutions and earn money by setting a spread between bid and ask prices. Candlestick Chart - A type of chart used in Technical Analysis. Each time division on the chart is displayed as a candlestick – a red or green vertical bar with extensions above and below the candlestick body. The top of the extension shows the highest price for the chart division and the bottom of the extension shows the lowest price. Red candlesticks indicate a lower closing price than opening price, and green candlesticks indicate the price is rising. Cross Currency – A currency pair that does not include US dollars – e.g. EUR/GBP. Currency Pair – Two currencies involved in a FOREX transaction – e.g. EUR/USD. Economic Indicator – A statistical report issued by governments or academic institutions indicating economic conditions within a country. First In First Out (FIFO) – refers to the order open orders are liquidated. The first orders to be liquidated are the first that were opened. Foreign Exchange (FOREX, FX) – Simultaneously buying one currency and selling another. Fundamental Analysis – Analysis of political and economic conditions that can affect currency prices. Leverage or Margin – The ratio of the value of a transaction to the required deposit. A common margin for FOREX trading is 100:1 – you can trade currency worth 100 times the amount of your deposit. Limit Order – An order to buy or sell when the price reaches a specified level. Lot – The size of a FOREX transaction. Standard lots are worth about 100,000 US dollars. Major Currency – The euro, German mark, Swiss franc, British pound, and the Japanese yen are the major currencies. Minor Currency – The Canadian dollar, the Australian dollar, and the New Zealand dollar are the minor currencies. One Cancels the Other (OCO) – Two orders placed simultaneously with instructions to cancel the second order on execution of the first. Open Position – An active trade that has not been closed. Pips or Points – The smallest unit a currency can be traded in. Quote Currency – The second currency in a currency pair. In the currency pair USD/EUR the euro is the quote currency. Rollover – Extending the settlement time of spot deals to the current delivery date. The cost of rollover is calculated using swap points based on interest rate differentials. Technical Analysis – Analysis of historical market data to predict future movements in the market. Tick – The minimum change in price. Transaction Cost – The cost of a FOREX transaction – typically the spread between bid and ask prices. Volatility – A statistical measure indicating the tendency of sharp price movements within a period of time. About The Author: This article provided courtesy of http://www.daytraderfutures.net Copyright Norman Fleming - http://www.daytraderfutures.net |
