All About Online Forex Trading

It was a strange sight in the past to witness customers exchanging stacks of money with their agents at public places such as the international bus terminus, prominent official buildings or even at the airports. These agents were prepared to sell you the foreign currency that you want with a little profit given to them. However, all these have changed over generations. Forex trading is now handled by licensed companies and unsolicited individuals are not allowed to operate illegally. With the invention of new technologies and the coming of professionals, Forex trading is now made easier and more systematic. It is also much safer to do business with these professionals to prevent scams.

At the beginning stage, most of the large companies would carry out their Forex trading via the different banks or even through the major institutes that deal with finances. These institutes had to be the ones that operate internationally. Forex trading has attracted a lot of popularity today because of the presence of modern technology. Via the use of the internet and the increasing telecom market, it is easier to spread messages and to bring across information on issues such as the economic polices worldwide. With the creation of the Forex Software that you can find on the internet, you will easily get the latest news about the Forex trading online. This has actually become a platform that facilitates the exchanges of trading since it makes it easy for you to seize opportunities on the spot and to implement your decisions immediately.

Apart from some problems at the beginning stage, Forex trading on the internet has become more standardized and the people who take part in Forex trading can now get a close to 100% secured access via the different companies that deal with Forex trading. The advantage of using these companies is that they are free from restrictions and give the customers more freedom of choice. As people now become more aware of the usefulness of Forex trading on the internet, it has helped to boost the popularity of advanced technology. Since it has been so successful to trade online, more people are entering this Forex trading platform and as a result, it has become commercially possible to use the Forex Software as a mean for trading exchanges to take place.

Surveys have shown that more and more people are getting involved in Forex trading. People joined for different reasons and in fact, some are even starting it as a hobby. In the conventional Foreign Exchange Market, this was usually dominated by big companies such as banks or Multi National Companies and you don’t get commoners involved apart from brokers. However, now there are many guide books on the trading methodologies, as well as trend analysis, so it will make it easy and safe for any newbies who might want to learn Forex trading online.

If you understand the margin trading concept that you apply in Forex, you can actually save a lot of money on deposits. It refers to the margin that is traded on and this margin differs depending on the banks’ policies but it will always in percentile terms based on the initial amount. How much you are allowed to play in Forex trading depends on what is the original amount given by the bank. The actual potential can be illustrated by the example below. Let’s say a bank has imposed a 2% as the margin deposit. This means you will only have to put in $20000 USD as a deposit in order to trade for two million dollars. As such, you will be able to increase by 200% for your profit. On the other hand, should you be unlucky and loses money in the Forex trading, the margin deposit of 2% will mean a loss of 200% too. Whether you are playing Forex trading online or offline, the rules are the same.

So long as you participate in investments, there will be the impending dangers of profits or losses. As it is, the Forex trader’s luck online can be anywhere between 2 to 25% on an average each day. As a newbie in Forex trading, it is essential that you know that your deposit’s interest rates will change depending on the currencies. As such, most traders play in a few different currencies in the world of Forex, which is what is known as the variable currency and the Base currency. This is applicable both in the conventional mode as well as the Forex online mode. In order to be a successful Forex trader, you will need to have an ability to analyze, a high level of knowledge on the subject and your intuition to act appropriately when the opportunities come. You must also be able to make full use of your Return on Investment (ROI) so as to gain the most profits from this lucrative financial market

A Brief Overview of Forex Markets

The global foreign exchange market is the biggest market in the world. The 3.2 trillion USD daily turnover dwarfs the combined turnover of all the world's stock and bond markets.

There are many reasons for the popularity of foreign exchange trading, but among the most important are the leverage available, the high liquidity 24 hours a day and the very low dealing costs associated with trading.

Of course many commercial organisations participate purely due to the currency exposures created by their import and export activities, but the main part of the turnover is accounted for by financial institutions. Investing in foreign exchange remains predominantly the domain of the big professional players in the market - funds, banks and brokers. Nevertheless, any investor with the necessary knowledge of the market's functions can benefit from the advantages stated above

Forex Strategy

A US Dollar breakdown led to impressive gains in several of our trend-following forex trading systems, and continued dollar tumbles would bode well for these strategies’ performance. Yet the Greenback’s tumbles did not produce a noteworthy shift in forex options market volatility expectations—suggesting that few expect strong continuation in US Dollar weakness. Record-high correlations to the S&P 500 and other key risk barometers suggests market conditions outlook will greatly depend on the trajectory of financial market risk sentiment.

Given great uncertainty surrounding near-term forex market conditions, we will maintain our bias towards Range and Breakout systems. If nothing else, our Breakout strategies' relative consistency through varied market conditions give us confidence that they may continue to trade well. To partially hedge against risks that currencies will return to broad trading ranges, we will watch for any worthwhile Range system opportunities. Yet risk on said trades should be kept tight in case of continued trending conditions in the US Dollar and Japanese Yen.

online forex

ParagonEX is inviting all EiG Copenhagen 2009 participants to enter the “Play the Markets” contest on the ParagonEX stand #363. The lucky winner will walk away with a brand new Nintendo Wii™.

In a trading game where players have to guess if the market will be above or below a set number at a specific time, ParagonEX have managed to create an online gaming extravaganza. Using ‘no download’ technology, ParagonEX are showcasing this latest offering at EiG in Copenhagen from Tuesday 15th September until Thursday 17th September.

The VP Business Development at ParagonEX, Arik Peretz explains in no uncertain terms that this is going to be the latest craze to form a bridge between Online Gaming and Forex:

“We are certain that our latest Binary Options game will attract players who like to place a wager on the financial markets. Imagine watching a roulette table and wagering on black to appear at a given time. Although there are subtle differences, our product gives users the opportunity to choose a currency pair, for example, at a set time with a set market price and to decide if they think that price will have gone up or down at the specified closing time of the deal. It’s as simple as that. “

“All interested operators are invited to our booth #363, at EiG to independently assess if the Binary Options game would make a good addition to their current offering. To add a sweetener, we are holding a “Play The Markets” tournament in which the winner will receive a Nintendo Wii™.” Stated Arik Peretz, VP Business Development at ParagonEX.

Binary Options games are becoming ever popular across the world. ParagonEx are offering binary options trading based on the movement of financial instruments such as Currencies, Indexes such as NASDAQ and FTSE and also in commodities such as crude oil and gold.

About ParagonEX:
ParagonEX brings a paradigm shift to the way Retail Online Forex is managed.

ParagonEX is the provider of trading platforms for the Retail Online Forex market. Our product is the first platform solution to offer a holistic, browser based (download-free) software suite to online retailers operating in the Forex market.

forex trading online

This year, at least three Internet companies have opened offices in Dubai, trying to capitalize on growth opportunities in the region. Case in point: The retail Internet platform of Deutsche Bank, dbFX.com, recorded a 501% year-on-year increase in Middle Eastern currency trading volumes in the first quarter of 2009.

"The opportunities are ripe for foreign-exchange firms, because businesses in Dubai are already very aware and sensitive to foreign-exchange fluctuations," said Kathy Lien, chief strategist at Global Forex Trading, which opened a Dubai office last year.

Oanda Corp., with headquarters in New York, is the latest currency platform to open shop in Dubai, following Saxo Bank and FXCM Holdings LLC earlier this year.

Large institutions have already been working in the region. Deutsche Bank began offering currencies as an asset class to Middle East clients in 2005.

"The people there use forex all the time. They're very international - international payments; they need to hedge their currency exposure, and there are always people who speculate," said Michael Stumm, president and chief executive of Oanda, an Internet-based foreign-exchange trading and currency information service for individuals and large corporations.

However, Oanda has few offices, with the majority of staff working in its technology team. Its Dubai office, therefore, says a lot about the importance of the region, particularly as business there is largely driven by money management rather than individual traders.

"We tend to have more people ask us if we have managed fund products," said Lien of Global Forex Trading. Alternatively, big money managers or banks may be looking for new systems to use for their trading operations.

This is very different than the core business model for most of the online foreign-exchange brokers operating in the U.S., Europe and Asia.

"There's a very big shift in strategy for companies that have offices in Dubai," said Lien.

Stumm said he hopes to increase liquidity and bring down the cost of trading in currency markets in the Middle East with Oanda's foray into Dubai.

"A number of companies have been opening there," said Stumm. "Our plan is to shake up the market."

currency trading

Currency investment manager Overlay Asset Management (OAM) has launched two currency funds: the SingleHedge Currency Options Fund and SingleHedge Multi-Strategy Currency Fund.

The SingleHedge Currency Options Fund aims to achieve capital growth by taking active positions on currency volatility in addition to the direction of spot foreign exchange rates. A discretionary strategy, it is managed by Xavier Lefevre, head of portfolio management and trading.

OAM expects the fund to be attractive to institutional investors, delivering returns with a low correlation to the majority of currency funds.

The Multi-Strategy Currency Fund is a feeder fund seeking to deliver strong risk-adjusted returns through exposure to three underlying currency programmes managed by OAM. These are developed markets diversified program, emerging markets currency program and the aforementioned currency options strategy.

The developed markets diversified program, launched in April 2003, invests in seven developed markets currencies (US dollar, euro, yen, sterling, Swiss franc, and Canadian and Australian dollars. It currently represents around 97% of the developed market currency trading volume

The emerging markets currency program, launched in November 2007, invests in US dollar and euro as well as emerging markets currencies deemed sufficiently liquid by OAM's investment team. These include Argentina, Brazil, China, Czech Republic, Hungary, India, Indonesia, Korea, Mexico, Peru, Philippines, Poland, Romania, Russia, Singapore, South Africa and Turkey.

Investments into the underlying strategies are made through zero-fee share classes. There are no layered fees.

The currency options and multi-strategy currency programs are also available as segregated managed accounts, with risk parameters and return targets tailored to the client.

The currency options fund has sterling, US dollar and euro share classes and will trade foreign exchange spot, forwards, swaps and options, including vanilla and complex ones as well as cash management instruments. Redemption is weekly.

The fund, domiciled in Ireland and listed on the Irish Stock Exchange, began trading in June and has a net cumulative performance of 1.88%.

Maximum ex-ante volatility is 25% a year.

The multi-strategy currency fund also has three currency share classes (sterling, US dollar, euro) and trades the same instruments as the currency options fund. Net cumulative performance since inception in June is 42%. Like the currency options fund, this one also offers weekly liquidity and is listed on the Irish Stock Exchange.

Maximum ex-ante volatility is 25% a year.

Overlay Asset Management is the BNP Paribas Investment partner that specialises in currency management. Established in 1998, it provides currency management services including currency alpha program as well as active and passive currency hedging services to institutional investors. At August 31, 2009, Overlay Asset Management managed over £11 billion in client assets.

currency

he $ fell last week to the lowest level in a year as price swings in foreign exchange declined, encouraging investors to borrow greenbacks at record low interest rates and buy assets in countries offering yields as much as 8.1 percentage points higher than U.S. deposit rates. Borrowing costs in dollars as measured by London interbank offered rates fell below those of and Swiss francs for an extended period for the first time since 1994 during the past three weeks.

Thoare the most profitable since before 2000, according to data compiled by Bloomberg. Borrowing dollars and then selling them is adding pressure on a currency that’s already weakened 14 percent since March as the budget deficit exceeded $1 trillion, the government sells a record amount of debt and the Federal Reserve floods the financial system with $1.75 trillion to pull the economy out of a recession.

“The dollar is the big funding currency,” said , vice chairman of New York-based FX Concepts Inc., the world’s largest currency hedge fund, with $9 billion in assets under management. “The reason why people are borrowing the U.S. dollar for carry trade is A: It’s very cheap to fund, and B: The expectation is it’s going to go down.”

Risk Versus Returns

London-based Standard Chartered Plc, the most bearish of 45 firms in a Bloomberg survey, predicts the dollar will decline 6 percent versus the euro by year-end. Deutsche Bank AG in Frankfurt, the most accurate forecaster of the dollar in the first half of 2009 as measured by Bloomberg, is bullish, calling for it to gain 11 percent by the start of 2010.

Using the world’s reserve currency to fund carry trades became more profitable and less risky last month than with the yen for the first time since March 2008, Bloomberg data show. The difference in Sharpe ratios for dollars and yeof performance versus risk, has averaged 1.35 since May, compared with minus 0.37 since 2004. The higher the Sharpe ratio, the higher the risk-adjusted return.

“The way everyone is funding their risky investments is by using dollars,” said the head of foreign-exchange strategy at Frankfurt-based Deutsche Bank, the world’s largest currency trader. “Interest rates between Japan and the U.S. are fairly comparable right now, which is incredibly unusual. Much of the past 20 years or so, the yen has been the funding currency of choice.”

29% Return

The three-month for dollars, a benchmark for about $360 trillion of financial products, fell today to an all-time low of 0.295 percent, compared with 0.355 percent for the yen and 0.305 percent for the Swiss franc, another traditional funding currency, according to the British Bankers’ Association in London. Over the past 20 years dollar Libor has averaged almost 3 percentage points more than yen Libor.

An investor who borrowed $10 million dollars in March to fund the purchase of a basket of 10 currencies including the Brazilian real and South African rand would have paid 1.27 percent initially. The trade would have delivered a 29 percent return through last week as the offshore funding rate dropped to 0.53 percent, according to three-month deposit rates for the currencies compiled by Bloomberg.

That same strategy funded in yen would have returned 19 percent with wider swings in daily returns, Bloomberg data show. That trade funded in francs would have earned 16 percent.

Real, Rand

The basket comes from the most actively traded currencies in the Bank for International Settlements’ triennial survey that offer the highest three-month rates. Brazil’s benchmark is 8.6 percent and the real has appreciated 26.4 percent this year. South Africa’s borrowing rates are 7.2 percent. The rand has strengthened 28 percent compared with the U.S. currency.

Volatility, which can wipe out gains from carry trades, also favors using the dollar over yen. Three-month euro-dollar volatility fell to 10.2 percent on Sept. 11, while three-month dollar-yen volatility declined to 11.9 percent. The difference is the biggest since December.

Record low borrowing costs, designed to help pull the economy out of the deepest slump since the Great Depression, may be hurting the dollar more than supporting it. The Fed and Chairman cut the target fed funds rate to a range of zero to 0.25 percent in December, from 5.25 percent in September 2007.

Dollar Index

The Dollar, which tracks the dollar against the euro, yen, U.K. pound, Canadian dollar, Swiss franc and Swedish krona, rose 17 percent from Sept. 15, 2008, to March 5, 2009, as investors sought the safety of U.S. assets following the collapse of Lehman Brothers Holdings Inc. and the government’s bailout of insurer American International Group Inc. When the panic receded, the index fell 14 percent to 76.972 today as investors focused on deficits in the U.S. and interest rates.

Investor appetite for dollars may benefit from the growing gap between short- and longer-term borrowing costs in the U.S., according to a foreign-exchange strategist at Barclays Bank Plc in Tokyo.

Yields on 10-year Treasuries ended last week at 2.44 percentage points more than two-year notes, the third-widest spread of any Group of 10 nation after the U.K. and Sweden. The so-called yield curve in Japan is 1.10 percentage points.

Rate Outlook

Policy makers may also help the dollar appreciate, at least against the euro. The European Central Bank will wait until the final quarter of 2010 to increase its mark rate from 1 percent, according to Euribor interest-rate futures. The odds that the Fed will raise its target rate for overnight bank loans as soon as the second quarter are almost 59 percent, fed funds futures on the Chicago Board of Trade show.

For now, the U.S. currency is weakening after the budget deficit expanded to $1.27 trillion in the first 10 months of fiscal 2009 that ends Sept. 30. The gap will widen to $1.6 trillion in 2010, according to the Congressional Budget Office.

The Obama administration has pushed the nation’s to an unprecedented $6.78 trillion to spur growth, support the financial system and service record deficits. The Fed is pumping in $1.75 trillion to keep credit flowing by purchasing Treasuries and mortgage bonds.

The drop in the U.S. currency has contributed to a 9.4 percent gain in theIndex of 19 raw materials. Gold has risen 13 percent this year to about $1,000 an ounce, while crude oil has soared 53 percent to $68.21 per barrel.

Last week, Standard Chartered reiterated its call for the dollar to weaken to $1.55 per euro by year-end, from $1.4571 on Sept. 11. Zurich-based UBS AG, the world’s second-largest currency trader, lowered its forecasts last week for the dollar.

Yen Volatility

Royal Bank of Scotland Group Plc in Edinburgh will probably raise its year-end yen forecasts to “the order of 88 versus the dollar and 122 versus the euro” Greb gires a foreign-exchange strategist in Sydney, wrote in a report last week. The yen ended Sept. 11 at 90.71 to the dollar and 132.17 to the euro.

Yen volatility may increase after the Democratic Party of Japan and two other political parties take power in Japan for the first time this week, according to, a senior currency trader at Mizuho Corporate Bank in New York.

The DPJ needs to find 7.1 trillion yen ($78.3 billion) to fund its election pledges in the year starting April 1, and the amount would swell to 16.8 trillion yen in 2013, according to its campaign manifesto. The new administration, led by Prime Minister-designate Yukio has said it will increase funds for child care, education and employment partly by diverting as much as 5 trillion yen of stimulus spending already approved.

“People are watching what this new government will do in this new era,” said Yanagihara. “That will cause higher long- term interest rates and maybe the budget deficit will inflate.”

Mini Forex Trading

Mini forex trading was created for new traders entering the forex market. The mini forex account is designed to be one tenth the size of the standard account and the is just $1 per pip. The mini forex account is beneficial for new traders to improve their forex trading skills while being exposed to less financial risk on the market.

Success in the forex market and becoming a profitable trader depends on a lot of practice and experience. It is still essential to practice first with the demo trading software to enable you to get comfortable with the trading platform and to get a feel of the real market. Once you get an idea of what to expect in the forex market, it is wise that you should open a mini forex trading account. Now you are dealing with real money.

Although you might risk losing real money, mini forex trading accounts only requires a small investment of money. It can also give you a small amount of profit. The key to mini forex trading is to enhance your skills until you are ready to trade with the big traders.

To start a mini forex account, there are some characteristics you should know:

• Required minimum account deposit, this is known as margin (eg: $100 - $250)
• Recommended account deposit
• Traded in 10,000-unit currency lots
• A default margin
• Leverage up to 200:1

Mini forex trading has little disadvantages than a regular forex account. Of course it can only make small profits but the risk in regular trading is much larger. Because of only investing small sums of money, mini forex trading reduces the risk of your loss. You can always make another deposit if you lose.

In mini forex trading, you can also use the same software used by regular forex traders, this can work in your advantage. It will be like trading like the big traders only you are just trading in small amounts. Therefore, it eliminates fear of losing. Mini forex trading can also acquire you the proper discipline a forex trader has to have.

Another great feature of starting a mini forex trading account is that there is no maximum trade volume. You are able to trade 10,000 units or even 200,000 units even if the standard size of a mini forex account is 10,000 units. This enables you to develop your skills, trading strategy and technique before slowly increasing the size of your trades

The mini forex trading account is ideal for beginners or novices that are just starting to enter the world of forex trading. Here, the risk is real and the money is real. Mini forex trading is an effective way to learn forex trading without the thought of losing too much money...

Forex vs Stock Market

Two of the main differences between (and some would say advantages over) the forex market compared to the stock market are:

1. Trading hours. The forex market is open 24 hours a day. Trading is done over three continents, allowing a trader to trade continhttpand to react immediately to events and new developments. The market opens on Sunday evening and closes Friday night.

2. Commissions. Electronic trading and competition have brought about a sizeable reduction in the bid-offer spread (the equivalent of commissions). The spread covers the risk of the market maker. The spread for the majors remain very low, but can increase as the liquidity of a specific currency drops. Despite recent reductions of commissions through online stock brokers, the Forex market is considered, by some, to have the lowest commissions relative to trade size when compared to other financial markets. This is also in part due to the 100:1 leverage offered by most trading houses. A client with a $10,000 deposit can leverage this to $1,000,000. Some electronic communication network brokerages have introduced a per trade commision alongside a narrow pip spread.

Many retail trading houses would suggest that the large size of the market makes it impossible for a speculator to affect the market. This is not quite the truth - the stakes are higher, larger quantities of money are involved, and the bigger banks spend a lot of time and effort trying to manipulate the market. Governments have been known to step in and affect prices.

Forex Trading Concept with SigmaForex

Forex, or the foreign exchange market (also commonly known as FX or simply, “currency”) involves trading one currency for another. Forex is by far and away the largest financial market in the world. Trades are made between large banks, central banks, currency speculators, multinational corporations, governments, and even the other financial markets. According to The Bank for International Settlements (BIS), a world-wide central bank organization, the average daily trade in the global forex and related markets is currently over three trillion US dollars – A DAY. This is several times larger than all the U.S stock markets combined. The trading is done from all round the world, with little or no hard cash changing hands

Forex Market Update - U.S. Dollar Still Low

Viewed by some as an upset in the forex market, U.S. currency almost hit a record low recently when compared to other major currencies. There still remains some pressure coming from China when reviewing recent comments that mention the possibility of the nation diversifying reserves separate from the American dollar.

The U.S. dollar hit a rock bottom record low of 1.4729 when put next to the euro, and 2.1070 when compared to the pound. This was only after Cheng Siwei, vice chairman of China's National People's Congress, mentioned that the nation may change to “stronger” forms of currency.

Jeffery Lacker, president of the Richmond Federal Reserve Bank, also made some comments that support the Reserve's choice to slash key Federal fund rates by 1/2 of a point. Lacker, who does not actively vote on the Federal board, mentioned that the Federal Reserve most likely “did the right thing” when referring to the recent rate cuts.

Thomson IFR Markets representative Rhonda Staskow mentioned that Lacker's remarks “also suggest that there is a great deal of uncertainty over the sub-prime/housing/CDO issue and how that will play out.”

Staskow also mentioned that, “A crisis of confidence of the dollar and over the asset levels of banks continues.”

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Forex Market

Some Basic Facts

The forex market is the largest and most popular financial exchange in the world. The average volume traded on the forex market is 4 trillion dollars a day compared to 25 billion dollars a day on the New York Stock Exchange.

You may already be familiar with some of the main currencies that are traded on the forex exchange but here are just a few: The US Dollar, Euro, British Pound, Swiss Franc, and the Japanese Yen. The players in the forex market are central banks, large commercial banks, hedge funds, brokerage firms, and private individuals.

Forex Market Hours

One of the main reasons why the forex market is so popular is because it is a 24 hour continuous market. Although the sessions on each of the separate exchanges generally open from 10AM to 6PM local time, they overlap each other like a relay race. Therefore, you can trade at any time and you can set your own hours. This is great for those who are not interested in a typical 9 to 5 job or for those who want to start trading on a part time basis.

Equal Opportunity Trading

The forex market is considered part of the Over The Counter, or OTC market, which means it doesn’t have a physical or central location. The forex market is run electronically within a network of banks and is made up of all participants that trade between themselves. The sheer size of the forex market makes it impossible for large investment or central banks to manipulate pricing for extended periods of time. This levels the playing field for all the average joe traders out there.

What it Means for You

Since there isn’t a centralized location and because there is little regulation of the forex market, there is heavy competition between different providers to attract the most traders and volume. It also means that the firm you trade with is your counterpart. The advantages are that you can trade directly with the market and that your transaction costs are kept down. The ability to make large profit off leverage is another advantage to the stock exchange. With some firms, you can trade or borrow up to 200 times the balance in your account. This means that a .5% move in the market can turn into a 100% gain.

The forex market is also popular because it doesn’t cost much to start trading. You have to be in it to win it, as some lotto slogans say. There are some online forex brokers that require as little as $10.00 to deposit in a trading account to get started. In the beginning, only large institutions could trade on the forex market; however the internet has made it possible for smaller investors to trade as well. Due to the popularity of online forex trading, the competition between online forex brokers is fierce. As a direct result, the minimum deposits to trade have now become very low

What is Foreign Exchange?

The Foreign Exchange market, also referred to as the "FOREX" market, is the largest financial market in the world, with a daily average turnover of approximately $1.5 trillion. Foreign Exchange is the simultaneous buying of one currency and selling of another. The world's currencies are on a floating exchange rate and are always traded in pairs, for example EUR/USD or USD/JPY

Why haven't I heard of Foreign Exchange?
The answer is simple: the currency market was simply financially inaccessible to the general population of investors and traders, and the minimum account requirements were beyond the resources of the average investor. Since then, the situation has changed dramatically. Now under new bank regulations, instead of a minimum investment of $200K, accounts can be opened for $10 - $50K.

Who are the participants in the FOREX Market?
The FOREX market is called an 'Interbank' market due to the fact that historically it has been dominated by banks, including central banks, commercial banks, and investment banks. However, the percentage of other market participants is rapidly growing, and now includes large multinational corporations, global money managers, registered dealers, international money brokers, futures and options traders, and private speculators.

When is the FOREX market open for trading?
A true 24-hour market begins at 7 p.m. Sunday evening through 3 p.m. Friday EST. FOREX trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, then London, and New York. Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night.

What are the most commonly traded currencies in the FOREX market?
The most often traded or 'liquid' currencies are those of countries with stable governments, respected central banks, and low inflation. Today, over 85% of all daily transactions involve trading of the major currencies, which include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and the Australian Dollar.

What is Margin?
Margin is a faith deposit for each opened position. This deposit is used to secure a position within the market and is added to or deducted from when profits or loss is in effect, then returned to the account when positions are closed.

How are currency prices determined?
Currency prices are affected by a variety of economic and political conditions, most importantly interest rates, inflation and political stability. Moreover, governments sometimes participate in the FOREX market to influence the value of their currencies, either by selling their domestic currency in an attempt to lower the price, or conversely buying to raise the value of their currency. This is known as Central Bank intervention. Any of these factors, as well as large market orders, can cause high volatility in currency prices. However, the size and volume of the FOREX market makes it impossible for any one entity to "drive" the market for any length of time.

How much money do I need to open a FOREX trading account with Pinnacle Exchange?
Pinnacle-Exchange offers both self-traded and dedicated managed accounts. The minimum deposit for a self-traded account is $1,000. Managed accounts require a minimum of $10,000.

Is Foreign Exchange as risky as everyone thinks?
One way to measure risk is to compare a financial product's risk relative to its return. If you take the time to compare an investment in FOREX to common investments such as equities and fixed income, you will find that from a risk/reward standpoint, FOREX investments provide respectable returns and should be considered viable portfolio diversification tools

Forex Market Basics

The Foreign Exchange market (also referred to as the Forex, FX market, “Cash” Forex or Spot Forex market ) is the largest financial market in the world, with more than $1.5 trillion changing hands every day — 30 times larger than the combined volume of all U.S. equity markets. Another major feature of the Forex market is that it operates 24 hours a day, corresponding to the opening and closing of financial centers in countries all across the world, starting each day in Sydney, then Tokyo, London and New York. At any time, in any location, there are buyers and sellers, making the Forex market the most liquid market in the world.

What to trade in Forex Market?

In the forex market, currency trading is always done in currency pairs, such as EUR/USD or GBP/USD. Accordingly, all trades result in the simultaneous buying of one currency and the selling of another. The base currency is the “basis” for the buy or the sell. It is useful to consider the currency pair as an instrument, which can be bought or sold.

Understanding Forex quote

• Base currency: The first currency in the pair.
• Counter Currency: The second currency in the pair. Also known as the terms currency.

The US dollar is the centerpiece of the Forex market and is normally considered the ’base’ currency for quotes. This includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. For example, a quote of USD/CAD 1.1302 means that one U.S. dollar is equal to 1.1302 Canadian dollar.

BID and ASK Prices

When trading forex you will often see a two-sided quote, consisting of a ’bid’ and ’ask’. The ’bid’ is the price at which you can sell the base currency (at the same time buying the counter currency). The ’ask’ is the price at which you can buy the base currency (at the same time selling the counter currency).

Commission-free, but with spreads

Most Forex brokers offer commission-free Forex trading. Spread - The difference between the bid and ask price of a currency. Normally 3-5 pips on the Majors.

Rollover - What happens to my open positions at the end of the trading day?

Process whereby the settlement of a deal is rolled forward to another value date. The cost of this process is based on the interest rate differential of the two currencies. Most brokers will automatically roll over your open positions, allowing you to hold a position for an indefinite period of time.

Leverage & Margin

The leverage available in forex trading is one of main attractions for many traders. Leveraged trading, or trading on margin, simply means that you are not required to put up the full value of the position. Forex brokers provide more leverage than stocks or futures. In forex trading, the amount of leverage available can be up to 400 times the value of your account.

Short History of Forex Markets

In the 1980’s the movement of money across borders accelerated with the advent of computers and the market became a continuum, trading through the Asian, European and American time zones. Large banks created dealing rooms where hundreds of millions of dollars, pounds, euros and yen were exchanged in a matter on minutes. Today electronic brokers trade daily in the forex market, in London for example, single trades for tens of millions of dollars are priced in seconds. The market has changed dramatically with most international financial transactions being carried out not to buy and sell goods but to speculate on the market with the aim of most dealers to make money out of money.

London has grown to become the world’s leading international financial centre and is the world’s largest forex market. This arose not only due to its location, operating during the Asian and American markets, but also due to the creation of the Eurodollar market. The Eurodollar market was created during the 1950’s when Russia’s oil revenue, all in US dollars, was deposited outside the US in fear of being frozen by US authorities. This created a large pool of US dollars that were outside the control of the US. These vast cash reserves were very attractive to foreign investors as they had far less regulations and offered higher yields.

Today London continues to grow as more and more American and European banks come to the city to establish their regional headquarters. The sizes dealt with in these markets are huge and the smaller banks, commercial hedgers and private investors hardly ever have direct access to this liquid and competitive market, either because they fail to meet credit criteria or because their transaction sizes are too small. But today market makers are allowed to break down the large inter-bank units and offer small traders the opportunity to buy or sell any number of these smaller units (lots).

What's Forex?

Forex is an acronym for foreign exchange, a market where people exchange the currency of one country for the currency of another in order to do business internationally. Typical situations in which such currency exchange is necessary include payments of import and export purchases and the sale of goods or services between countries
Forex is also called the cash market or spot interbank market. The spot market means trading on-the-spot, at whatever the price is at that moment.

Introduction to Forex Trading

Foreign Exchange is the simultaneous buying of one currency and selling of another. In other words, the currency of one country is exchanged for that of another.

The currencies of the world are on a floating exchange rate, and are always traded in pairs - Euro/Dollar, Dollar/Yen, etc. In excess of 85 percent of all daily transactions involve the trading of the major currencies - U.S. Dollar, British Pound, Euro, Swiss Franc, Japanese Yen, Canadian Dollar and Australian Dollar.

The Foreign Exchange market (FOREX) is the largest and most liquid financial market in the world with a daily turnover of over $2 trillion, more than three times the aggregate amount of the United States Equity and Treasury markets combined. By comparison, the currency futures market is only one percent the size of the Foreign Exchange Market.

Unlike other financial markets like the futures and stock markets, the Forex market has no physical location and no central exchange. It operates through an electronic network of banks, corporations and individuals (referred to as Interbank) trading one currency for another.

Forex Market Explained

In the forex market, currencies are exchanged through a floating exchange rate system. The forex market has no central exchange and has no trading floor. It is considered as an 'over-the-counter' (OTC) market and is run electronically within a network of banks known as the interbank market. The FX market runs continuously 24 hours a day from Sunday afternoon to Friday afternoon.

In the past, the forex interbank market was not available to small investors and only the world’s largest banks were allowed to trade openly. Since the introduction of the internet, have emerged to cater for the needs of almost any individual with the use of online forex currency trading platforms. The trading platform is where you will execute all of your trades with your broker with just a few clicks of the mouse.

Individual traders like you and I are known as “Retail Traders”, and must go through retail brokerage firms in order to buy and sell currencies on the foreign exchange market. Today, however, you can buy and sell currencies at the click of a button, in much the same way as you buy and sell stocks. Everything has been automated and linked up electronically. Exchanges in the Forex market happen instantaneously.

You should know up front that online retail trading by individuals (represented by online retail brokers) is still in its infancy. Prior to the Internet, and subsequent availability of real-time market data, it was virtually impossible for the average person to get involved in the foreign exchange market with any degree of success.

The Key to Learning Forex Markets and Winning Big

The Popularity of Foreign Exchange

The Foreign Exchange market is getting a lot of attention from people trying to make cash on the Internet. Most people want to supplement the income they are getting from their everyday 9-to-5. The Foreign Exchange market has become an opportunity for people to take control of their lives financially and be their own bosses which makes learnig forex markets very appealing in this day and age.

Fundamentals of the Market

The fundamental thing to keep in mind when learning Forex markets is that it runs on the same principle that other markets such as the stock market and commodities market does. It runs on the simple concept of supply and demand. But not only that, the most fundamental practice of investing is to buy low and sell it high. If the dollar in Australia is worth $.50 at the moment and you’re using technical analysis that tells you it’s probable for an uptick, then you would make a guess that it will gain up and value. This is when you would acquire the Australian currency at around $.75 and sell it when the value increases much higher. This is done with something called pairs of currencies. This is what traders in the Forex market look for when trying to probe. This allows a traitor to look out for indicators in the economic conditions that will allow them to sell and make enormous profits.

The Powerful Automatic

Traders in market use software programs that can spot trading automatically. Anyone that is a professional and has been trading for quite a while will utilize this software to maximize their profit potential drastically. When you start out learning Forex markets and began trying to reap profits it will be important to learn how to use this trading software sufficiently. These very programs will be the difference between what will either make or break you in the Foreign market. There are many pieces of software out there and there are many trading systems and the best ones, when implemented, will create tremendous wealth. Learning Forex markets does not have to be difficult or complex. It will seem at first very daunting but once you become familiar with trading minute by minute, things will fall into place so easily that you’ll be well on your way to being your own boss and working from the comfort of your own home. This is what drives so many people to get into learning Forex markets in the first place.

This article is about basics but you can learn more about a specific method that I personally use to make gains upwards of 300-500% weekly on every trade with very minimal losses in between at freely and I recommend stopping by if Forex trading sounds of the slight bit interest to you or if you are serious about making money right from in front of your computer.

The Forex market, established

Forex or Foreign Exchange market is the largest financial market in the world. This market has a daily average turnover of US$1.9 trillion dollars a day which is greater than the combined volume of all U.S. equity markets.


Foreign Exchange is a cash market in foreign currencies made by large banks. In this market, currencies are bought and sold and exchange rates are determined. Unlike the Stock Market, Forex works on a 24 hour clock allowing for after hours trading. The Forex Market allows you the freedom and flexibility to build your portfolio on your timetable not the Stock Exchanges.


Forex market trading does not occur on the Stock Exchange and is considered an Over The Counter market as is the NASDAQ. These transactions can occur electronically or over the phone.

forexeducation

The Forex market, established in 1971, was created when floating exchange rates began to materialize. The Forex market is not centralized, like in currency futures or stock markets. Trading occurs over computers and telephones at thousands of locations worldwide.

The Foreign Exchange market, commonly referred as FOREX, is where banks, investors and speculators exchange one currency to another. The largest foreign exchange activity retains the spot exchange (i.e.., immediate) between five major currencies: US Dollar, British Pound, Japanese Yen, Eurodollar and the Swiss Franc. It is also the largest financial market in the world. In comparison, the US stock market may trade $10 billion in one day, whereas the Forex market will trade up to $2 trillion in one single day. The Forex market is an opened 24 hours a day market where the primary market for currencies is the 24-hour Interbank market. This market follows the sun around the world, moving from the major banking centres of the United States to Australia and New Zealand to the Far East, to Europe and finally back to the Unites States.

Until now, professional traders from major international commercial and investment banks have dominated the FX market. Other market participants range from large multinational corporations, global money managers, registered dealers, international money brokers, and futures and options traders, to private speculators.

There are three main reasons to participate in the FX market. One is to facilitate an actual transaction, whereby international corporations convert profits made in foreign currencies into their domestic currency. Corporate treasurers and money managers also enter the FX market in order to hedge against unwanted exposure to future price movements in the currency market. The third and more popular reason is speculation for profit. In fact, today it is estimated that less than 5% of all trading on the FX market is actually facilitating a true commercial transaction.

The FX market is considered an Over The Counter (OTC) or ‘Interbank’ market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network. Trading is not centralized on an exchange, as with the stock and futures markets. A true 24-hour market, Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, London, and New York. Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night.

Posted in forex market No Comments » Forex Trading Accounts – What You Need To Know

There are two types of forex accounts: a mini forex account and a regular forex account. Mini forex trading is an excellent way for small investors to learn about and take part in forex trading and with the most forex brokers offering a leverage of 100:1, mini forex trading will allow you to control a $10,000 currency position with a deposit of only $100. Mini forex trading is a great way to get a feel for forex trading and learn the tricks and skills needed to succeed without having to go to great expense. Why not try mini forex trading now and see just how easy it is to profit with forex trading.

Forex trading until recently was reserved for banks and other large financial industries but thanks to the power of the internet and online currency trading, forex has now become feasible for everyday people. The forex market has become the largest trading market in the world and each day there is an estimated turnover of over $1.5 trillion dollars. Another added bonus is that forex trading is available 24 hours a day, 5 days a week unlike most other markets that operate on an 8 hour day. This means that people wishing to trade forex can do so at any given time.

Forex trading is the new way to make money through online currency trading. With a worldwide market and over 60 currencies for you to trade there has never been an easier way to make money online.

Forex currency trading is done is pairs and these are known as crosses. These pairs are always against the US dollar and the main crosses you will find when trading forex are the USD/EUR and the USD/GDP. The most popular crosses are known as majors and these can makeForex traders great profits. Currencies change on a regular basis and are based on the how the world financial markets see the value of the $. You can sell or buy these currencies and forex brokers do not charge commission fees.

What is the Stock Market?

efinition - At the stock market, stocks of listed companies are dealt. The term stock market is used for the overall stocks sold and bought at stock exchanges. A group of organizations can constitute a stock exchange to perform share dealings. For example, USA NASDAQ and NYSE are stock exchanges.

Functionality - In the stock exchange everyone can participate with respective stocks. It doesn’t matter where it is based or how much stock the trader possesses. In the stock market, small investors to big traders everybody trade together. The price of a stock depends on the demand and supply of that particular stock. In stock markets, the share dealing is done by a middleman. The person is known as a share broker. The seller and buyer mutually decide the price of the trade. There is an open place in the stock market for trading and the process is known as open outcry. Here traders gather and wildly shout their individual quote to sell their stock. In this kind of auction (the ‘verbal bid’) the bidding price changes simultaneously and stops only when a bid is singled out as the highest. The other type of trading is virtual and performed on the computer. In this type of exchange, tradres sitting on computer terminals bid through computers within a network.

Forex Swing Trading System

If you want to get into Currency trading (Foreign eXchange) , you need accurate forex trading signals. Since this is a swing trading system, you can now trade at ease. So if you do not have the time to constantly monitor your charts and prices, this style is recommended for you.

We post buy and sell signals for most of the traded currencies including exotics (EUR/USD, GBP/USD, USD/CHF, USD/JPY, AUD/USD, EUR/JPY, GBP/JPY, CHF/JPY, AUD/JPY, CAD/JPY, EUR/CHF, GBP/CHF, AUD/NZD, EUR/AUD) . We will send email alerts with any adjustments to our positions

Sign up for our 1-month free trial subscription below. If you sign up now with a paid subscription, I will reveal a risk arbitrage (statistical arbitrage) trading system for those who do not want to take directional risk and want to take almost riskless trades.

FOREX MARKET SIZE AND LIDUIDITY

In order to understand the functioning of the forex or the foreign exchange trading markets, it is primarily necessary to comprehend what is meant by the term ‘relative value’. It can be substantiated as follows. Every country in the world has its own distinct currency and it is possible to compare the value of the currency of one country to that of the currency of another country by determining a secular value which is popularly referred to as the relative value. It is always necessary to keep in mind that the relative value will never be a regular value but rather it will continue to change across regular time intervals influenced by the alterations in the value of the currency in the financial markets.

Forex has often been referred to as the market closest to the perfect competition. According to the BIS, average daily turnover in traditional foreign exchange markets is estimated at $3.21 trillion. Daily averages in April for different years, in billions of US dollars, are presented on the chart below:

This $3.21 trillion in global foreign exchange market "traditional" turnover was broken down as follows:

• $1,005 billion in spot transactions
• $362 billion in outright forwards
• $1,714 billion in forex swaps
• $129 billion estimated gaps in reporting

In addition to "traditional" turnover, $2.1 trillion was traded in derivatives.

Exchange-traded forex futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts. Forex futures volume has grown rapidly in recent years, and accounts for about 7% of the total foreign exchange market volume, according to The Wall Street Journal Europe (5/5/06, p. 20).

Average daily global turnover in traditional foreign exchange market transactions totaled $2.7 trillion in April 2006 according to IFSL estimates based on semi-annual London, New York, Tokyo and Singapore Foreign Exchange Committee data. Overall turnover, including non-traditional foreign exchange derivatives and products traded on exchanges, averaged around $2.9 trillion a day.

What is Currency Trading and Can I Make Money With It?

Currency trading is quite self explanatory; it is the trading and speculation of world currencies within a regulated market environment. Popular names that attach themselves to it are Forex trading, FX trade, paper trade and the currencies market. Within its market structure, the Forex market or currency trading, is ruled by (pips), or percentage in points. Traders will try to make as many pips as they can (positive pips) within their trading time lines so that they can make as much money as they can. How this works is that when you do go into Forex trading, you need to choose a currency pair, with the most popular being the EUR/US or US/GBR. Trading is quite dynamic and ruled by market conditions within the region or market that you are trading with.

One thing you need to know about the currency market is that exchange rates may vary even in a single day. How? This is because of the interconnectedness of the Forex market, where different marketplaces are linked to each other due to plenty of over the counter trading. The exchange rate is then dependent on which bank or market dominator is trading in and which location the trade is going on in. The currency trade is dominated by large banks and financial conglomerates, which take up a large chunk of the market. This means that they are the market makers and regulators of the Forex market. A lot of traders use the London market price when quoting currency prices due to their dominance in the market.

There are many factors that affect trading, one of them, of course, being economical. They include government economic policy, procedures of major and central banks, economic conditions in various countries that affect the global market place, the health of consumer capitalism, reports, financial spreadsheets. A micro look into these factors would include things like government budgets, the health of global trade, trends in price fluctuations in the consumer market, levels of inflation in poorer states as well as the overall economic growth of many countries. Also, political conditions play a large factor within the currency market, with many factors like unrest, dissent, possibility of war - all can have a profound imbalance on the currency market.

Political conditions can have a positive or negative effect on a countries economy, which will then affect things like consumer spending, trade, inflation. It is through this key that you can make money on the Forex market because of its predictable nature. Market psychology has been evolving in patterns over the last few years and many investors have been taking advantage of this. Brokers base many of their strategies based on these patterns and have inculcated them into their casual level Forex programmes and support structures, which make it easy for you - the end user - to dive into the market and start making some investment decisions. While this article cannot fully tell what the aspects of currency trading - it can give you a nudge in the right direction, and with a bit of luck, help you make some money.

Click Here to claim your Free Forex "Basic Momentum Analysis" report today! Christopher Lee helps thousands of traders learn the proper way to trade currency.

Forex Fundamental Analysis

The two primary approaches of analyzing Forex markets are technical analysis and fundamental analysis. Fundamental analysis comprises the examination of economic indicators, asset markets and political considerations when evaluating a nation’s currency in terms of another. The focus of fundamental analysis lies on the economic, social and political forces that drive supply and demand. There is no single set of beliefs that guide forex fundamental analysis, yet most fundamental analysts look at various macroeconomic indicators such as economic growth rates, interest rates, inflation, and unemployment.

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Here we look at some of the major Forex fundamental factors that play a role in the movement of a currency:

Economic Indicators

Economic indicators are reports released by the government or a private organization that detail a country’s economic performance. These economic indicators can be released on a weekly basis, but the more common report is monthly. Indicators are based around a number of economical situations, of which the two primary factors are that of International trade and Interest. Subsidiary factors also include Consumer Price Index (CPI), Purchasing Managers Index (PMI), Durable goods orders, retail sales and Producer Price Index (PPI).

Currency’s Interest Rates

One of the major indicator factors, Interest rates, are a key economic function of any nation. Generally, when a country raises its interest rates, the country’s currency will strengthen in relation to other currencies as assets are shifted to gain a higher return. Interest rates hikes, however, are usually not good news for stock markets. This is due to the fact that many investors will withdraw money from a country’s stock market when there is a hike of interest rates.

International Trade

The trade balance portrays the net difference (over a period of time) between the imports and exports of a nation. A trade deficit can be an economic disaster for a government and a currency. A deficit may appear when a country is importing more than it is exporting, meaning that more money is leaving and less is coming in. In some ways, however, a trade deficit in and of itself is not necessarily a bad thing. A deficit is only negative if the deficit is greater than market expectations and therefore will trigger a negative price movement.