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Membership NO : 1 Posts : 1672 Join date : 2011-03-27
| Subject: What is Forex? Wed Jun 22, 2011 11:07 am | |
| What is Forex?FOREX - the foreign exchange market or currency market or Forex is the market where one currency is traded for another. It is one of the largest markets in the world.
Some of the participants in this market are simply seeking to exchange a foreign currency for their own, like multinational corporations which must pay wages and other expenses in different nations than they sell products in. However, a large part of the market is made up of currency traders, who speculate on movements in exchange rates, much like others would speculate on movements of stock prices. Currency traders try to take advantage of even small fluctuations in exchange rates.
In the foreign exchange market there is little or no 'inside information'. Exchange rate fluctuations are usually caused by actual monetary flows as well as anticipations on global macroeconomic conditions. Significant news is released publicly so, at least in theory, everyone in the world receives the same news at the same time.
Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX currency is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar.
Unlike stocks and futures exchange, foreign exchange is indeed an interbank, over-the-counter (OTC) market which means there is no single universal exchange for specific currency pair. The foreign exchange market operates 24 hours per day throughout the week between individuals with Forex brokers, brokers with banks, and banks with banks. If the European session is ended the Asian session or US session will start, so all world currencies can be continually in trade. Traders can react to news when it breaks, rather than waiting for the market to open, as is the case with most other markets.
Average daily international foreign exchange trading volume was $1.9 trillion in April 2004 according to the BIS study.
Like any market there is a bid/offer spread (difference between buying price and selling price). On major currency crosses, the difference between the price at which a market maker will sell ("ask", or "offer") to a wholesale customer and the price at which the same market-maker will buy ("bid") from the same wholesale customer is minimal, usually only 1 or 2 pips. In the EUR/USD price of 1.4238 a pip would be the '8' at the end. So the bid/ask quote of EUR/USD might be 1.4238/1.4239.
This, of course, does not apply to retail customers. Most individual currency speculators will trade using a broker which will typically have a spread marked up to say 3-20 pips (so in our example 1.4237/1.4239 or 1.423/1.425). The broker will give their clients often huge amounts of margin, thereby facilitating clients spending more money on the bid/ask spread. The brokers are not regulated by the U.S. Securities and Exchange Commission (since they do not sell securities), so they are not bound by the same margin limits as stock brokerages. They do not typically charge margin interest, however since currency trades must be settled in 2 days, they will "resettle" open positions (again collecting the bid/ask spread).
Individual currency speculators can work during the day and trade in the evenings, taking advantage of the market's 24 hours long trading dayTheir trade a Best Online Trading Be NowReal Money Doubling Forex Robot Fap Turbo - Sells Like Candy!ORDER NOWREAD MORE ABOUT ITThey simply want to open an account underneath a broker’s name and be ready to sneak into the net market using a high speed net connection and their personal computers. At the core of soil, could forex company of a shopping cart for the sale of currencies rise or fall in values to be either. The retailer is expected to provide a forecast of trends in currency and to remain in a position with this volatility and drastic change, so that the line to create the experience of the trade. And since the Internet opened twenty-four hours a day, seven days a week, it would like for any entrepreneur to vigilant with regard to the drastic changes in the values to be taking the most effective online trading opportunity. 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And although bankruptcy debts and the impending launch offers consumers a new account, people often remain unemployed and are not employed on a decent income, free agency will be found. could start bankruptcy seem like a good option to order a fresh, but it has a negative effect on your credit report for ten years, rendering it not possible for you to get a car, place of residence or employment. Before you decide to declare bankruptcy, it could be an intelligent decision of your talk plan with creditors and see if any refund can be worked out. Mallory McGuinness is an employed by debt collection agency. She also writes articles on business and finance, consumption and collection agenciesForex Trading EducationReal Money Doubling Forex Robot Fap Turbo - Sells Like Candy!ORDER NOWREAD MORE ABOUT ITOne of the most important things a trader can do is get a trading education. You can look at charts for weeks on end but if you do get a trading education you will soon be washed up as a trader.
Doctors and Lawyers get an education in their respective fields and they can go on to make alot of money. People that want to be professional traders need to get a trading education on how the markets work. Then they can go on to make more than any other profession. With out knowledge of the financial markets how can you expect to make alot of money?
How would you like a lawyer defending you when he went to art school. How wounld you like a doctor operating on you when he went to school to be an account. Lets say you want to trade for someone and you don’t even know what a trend is or a gap in the market or what time the news will be anouncements, or how much of the account that should be traded at one time. How can you expect to make money for your client. You need a trading education to make it as a trader.
A person needs a medical, a legal or a trading eduction to be successful in their chosen field.Correcting A Misguided Thought Process 7 of 7We have gone over some guidelines to help keep our thoughts about trading clear and on track. We have talked about:
Having a trading system and a set of rules. Using trading capital that will not have an impact if it is lost. Develop a win-loss ratio Good money management
When we lose it can trigger negative emotions. You can lose money and recover but if our emotions and self-confidence are lost then we will have a hard time trading and recovering from a loss. We can feel bad about foolishly losing some resources and get angry at just plain losing, which will get things out of prospective. We will then start to make some slight changes to our trading and not even realize it. If we do not get it under control then our trading discipline can get lost and we will soon be out of trading.
Traders need a system to keep them in control after losing on a trade. Many people that deal with real time like traders and athletes will get a trainer or someone they can talk to. You will need another person to talk to, to help you maintain balance and deal with things when you start to feel sorry for yourself.
Having a good attitude is just as important as money management and a good trading system. The system is only as good as the trader and the execution of the trades. So we need to trade like a robot and suppress our human emotions. Just follow the rules, develop a win-loss ratio so you know when to look for weaknesses and manage the trades for maximum profit and minimum losses.Money Management 5 of 7One of the basic laws to be used with the win-loss ratio is good money management. A win-loss ratio can be improved with good money management.
The first rule is to trade money you don’t need. If you don’t need the money then you can be more in control of your emotions and your trading. Make sure that the money you are trading with is not needed for personal living expenses. You need to know that the more money means to you, the harder it is to trade. To a trader money is just a means of measuring your trading results and success ratio.
Most traders feel that you should not risk any more than 5% of you trading account on any one trade. We feel that you may want to consider 1, 2 or 3 % to start with. So if you have an account of $8000, you should only trade $400 or 8 mini lots at one time using 5%. When you use 2% of your account you will only be trading 3.2 mini lots per trade. The reason to trade with such a small amount of money is to stay in the game and let the probabilities work for you. Preserve your trading capital so you can stay in the game. The more investment capital you have to trade, the better the chances of the probabilities working for you.Foreign Exchange Market Is Completely Different From The Stock MarketThe currency market is also referred to as the forex market. Trading that takes place between two counties with different currencies is the basis for the forex market. The foreign exchange market is over thirty years old, established within the early 1970’s. The foreign exchange market is one that is not primarily based on any business or investing in any one business, but the trading and selling of currencies.
The distinction between the stock market and the foreign exchange market is the vast trading that occurs on the forex market. There are thousands and thousands and tens of millions which can be traded day by day on the foreign exchange market, almost two trillion dollars is traded daily. The quantity is much higher than the cash traded on the each day stock market of any country. The forex market is one that includes governments, banks, monetary funds and similar forms of establishments from different countries.
What’s traded, purchased and bought on the foreign exchange market is one thing that can easily be liquidated, that means it may be turned again to cash quickly, or on occasions it is truly going to be cash. From one currency to another, the movement of money within the foreign exchange market is something that can happen quick for any investor from any country.
The distinction between the stock market and the foreign exchange market is that the foreign exchange market is international, worldwide. The stock market is something that takes place solely within a country. The stock market is based on companies and merchandise which might be within a country, and the forex market takes that a step further to include any country.
The stock market has set trading hours. Usually, that is going to be on trading day, and will be closed on banking holidays and weekends. The foreign exchange market is one that is open typically twenty four hours a day as a result of the huge variety of nations which are involved in foreign currency trading, buying and selling are located in so many times zones. As one market is opening, one other market is closing. This is the continuous way of how the forex market buying and selling occurs.
The stock market in any country goes to be primarily based on solely that countries currency, say for instance the Japanese yen, and the Japanese stock market, or the United States stock market and the dollar. However, in the forex market, you’re concerned with many countries, and lots of currencies. You’ll find access to a wide range of currencies, and this is a huge difference between the stock market and the forex market.
Looking to find the best deal on forex, then visit www.forexservicenet.com to find the best advice on forex trading for you.Forex Currency Trading SystemA quick overview of the FOREX Exchange Market will tell any investor, large or small, that one had better posses the best FOREX Currency Trading System on the market. But what makes the best FOREX Currency Trading System, you ask? Well before you can answer that you may want to consider the nature and size of the FOREX Market. Started in World War Two to protect a world-ravaged economy, The FOREX Market as we know it today is the advent of National Banking, Large Corporation, and private investors, all of whom possess the best FOREX Currency Trading System possible to meet their specific needs. And the best FOREX Currency Trading System is what it takes to manage transactions that can be affected by global politics, local and national foreign affairs, and as they say, the price of tea in China. Every factor must be weighed and considered before embarking on the most simple of FOREX Transactions. Considering all this, once can easily get lost in the minutiae of detail it might take to even contemplate the decision, and that is why many have gone down to ruin at the hands of their own FOREX Currency Trading System deficiency or even a lack of any kind of FOREX Currency Trading System at all.One simply cannot call a broker and execute a margin call. It�s too easy to fail if you rely on that as your FOREX Currency Trading System. Instead, using knowledge of outside market factors, the charts and graphs that directly indicate the daily nature of the market, and a wide variety of other available information from an array of sources, once can build and manage a FOREX Currency Trading System that will not only meet the demands of a growing global economy, but also protect the investor from the pitfalls of such a climate. A FOREX Currency Trading System is as essential as having a telephone or even the capital to invest. Without a FOREX Currency Trading System, doom and disaster await the under preparedReal Money Doubling Forex Robot Fap Turbo - Sells Like Candy!ORDER NOWREAD MORE ABOUT IT |
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