By analyzing forex market tendencies it can be more precisely said that all traders should consider the Yen and Euro. If you had to pick just one, you should be in favor of the euro. Because its position in market is much strong than other currencies.
You should always consider the Swiss Franc and British Pound - if you are trading a basket of currencies, but you should also consider the Australian and Canadian dollar.
While traders often neglect the Australian and Canadian dollar, they offer an important advantage in terms of diversification.
Diversification enable currency traders to spread risk and this can increase overall capital gains and help reduce risk and volatility.
So the result of our discussion is, with regard to best currencies start with euro and yen and add other currencies in for diversification and reduction of risk.
Friday, November 13, 2009
Best Currencies to Trade
I think the most important consideration in trading is the volume and liquidity of the currency traded in market.
By having good sense of currency trading, you will be able to exit positions quickly to lock in profits and just as importantly, cut losing trades quickly and keep losses to a minimum.
The most actively traded currencies against the dollar are:
. The Euro
· British Pound
· Swiss Franc
· Japanese Yen
All forex traders should consider these four currencies.
By having good sense of currency trading, you will be able to exit positions quickly to lock in profits and just as importantly, cut losing trades quickly and keep losses to a minimum.
The most actively traded currencies against the dollar are:
. The Euro
· British Pound
· Swiss Franc
· Japanese Yen
All forex traders should consider these four currencies.
trading currencies
In future conditions can be changed. so dont take this article crucial, it is just in accordance with present situation of forex market. Here is a brief personality of each currency and the advantages of trading it, based upon past performance:
British Pound
Thinner volume than the Euro or Japanese yen, means that short term trading should be done selectively, but this market is more suited to long term trend following. Thin volumes and low open interest can lead to exaggerated intraday moves and price spikes.
Euro
Any trader trading currencies should trade the euro. Good volume, high open interest and great long term trends, in addition good volatility is present for day traders and its recent status as a safe haven currency, means it is suitable for all traders.
Japanese Yen
The Yen offers fantastic long-term trends and offers some excellent volatility for day traders. Its slightly more erratic short-term price spikes than the euro, make it a currency that can produce more “false” signals than the euro, but generally, it is a great currency to trade. Like the euro volume and open interest is high.
Swiss Franc
In recent years the Swiss economy has become more integrated with Europe’s and the currency has a higher correlation to the euro, but it still represents a currency with great long term trends making it suitable for long term position traders. Like the British pound, volumes are not as high as the euro or yen and day trading conditions are not so good.
Australian Dollar
Quite thin volumes and large price spikes occur in Australian dollar, but it does offer good long-term trends and a diversification away from the major currencies.
Canadian Dollar
The Canadian Dollar is very similar to the Australian dollar. It offers good long-term trends and a diversification away from the major currencies; again, it is suitable for long-term trend followers and not day traders.
British Pound
Thinner volume than the Euro or Japanese yen, means that short term trading should be done selectively, but this market is more suited to long term trend following. Thin volumes and low open interest can lead to exaggerated intraday moves and price spikes.
Euro
Any trader trading currencies should trade the euro. Good volume, high open interest and great long term trends, in addition good volatility is present for day traders and its recent status as a safe haven currency, means it is suitable for all traders.
Japanese Yen
The Yen offers fantastic long-term trends and offers some excellent volatility for day traders. Its slightly more erratic short-term price spikes than the euro, make it a currency that can produce more “false” signals than the euro, but generally, it is a great currency to trade. Like the euro volume and open interest is high.
Swiss Franc
In recent years the Swiss economy has become more integrated with Europe’s and the currency has a higher correlation to the euro, but it still represents a currency with great long term trends making it suitable for long term position traders. Like the British pound, volumes are not as high as the euro or yen and day trading conditions are not so good.
Australian Dollar
Quite thin volumes and large price spikes occur in Australian dollar, but it does offer good long-term trends and a diversification away from the major currencies.
Canadian Dollar
The Canadian Dollar is very similar to the Australian dollar. It offers good long-term trends and a diversification away from the major currencies; again, it is suitable for long-term trend followers and not day traders.
choosing the right day trading firm
With the advent of the fast Internet oppertunities and much improved communication technology many investors are opting to trade from their homes. While you are trading from home there are a set of benefits if you choose to trade from the premises of a day trading firm and it makes sense at least initially to learn the tricks of the trade while working in a firm. You have access to the best available software platforms and the necessary hardware items. You must get to almost any data feed that you might be need. The most important and more crucial thing is that you get structured training programs and the opportunity to learn from other professional traders who can share their invaluable experience of trading with you.
There are too many firms offering you courses but to select best for you is the main quetion. Their training modules and fee structure differ from each other and you will have to pick the right course for you. The cheaper courses are not always the best. With a bit more investment you can get much more value for your money. So before you settle down on one particular firm spend some time and do a thorough research. Because spending money on a quality course can increase your money in trading.
there are some suggestions for you to select the best one for you.
• Before slecting you must take advice from professionals. But this is hardly the right alternatives to a personal experience. Clarify with the firms if they will allow you to spend a day or two at their firm for you to understand better the work ethics and the environment of the firm. If you find it suits you then you can shortlist the firm for your final list.
• Get to know how much of an account size would you need to be a member. It can range anything between $25000 to $50000.
• Find out whether there is any screening process in place for a person to become a member. If there is none and you are allowed to walk-in just because you have enough capital, then it is best to avoid such firms. Chances are you wont be getting the best of training there.
• Ask about the duration of the course. If the firm tries to sell you a crash course lasting a week, stay away. Day trading is not all that simple and don’t opt for courses which are do not run for at least a month. Be sure that they provide you with enough simulated training on trading so that at the end of your course you are ready to trade confidently in the real market.
• Obviously you got to find out what kind of an infrastructure the firm has in place and whether they will be providing you with the best software platforms and hardware tools available.
• Clarify if the firm is providing you with just a basic course on trading or they have course hours set aside for risk management strategies, and capital management basics. Such add-ons definitely help later in your career when you plan to trade all by yourself.
Find out if a firm demands a percentage of the profit you make while trading. If they ask for it then stay away from that firm. Better firms will allow you to keep your entire profit with you.
best of luck...
There are too many firms offering you courses but to select best for you is the main quetion. Their training modules and fee structure differ from each other and you will have to pick the right course for you. The cheaper courses are not always the best. With a bit more investment you can get much more value for your money. So before you settle down on one particular firm spend some time and do a thorough research. Because spending money on a quality course can increase your money in trading.
there are some suggestions for you to select the best one for you.
• Before slecting you must take advice from professionals. But this is hardly the right alternatives to a personal experience. Clarify with the firms if they will allow you to spend a day or two at their firm for you to understand better the work ethics and the environment of the firm. If you find it suits you then you can shortlist the firm for your final list.
• Get to know how much of an account size would you need to be a member. It can range anything between $25000 to $50000.
• Find out whether there is any screening process in place for a person to become a member. If there is none and you are allowed to walk-in just because you have enough capital, then it is best to avoid such firms. Chances are you wont be getting the best of training there.
• Ask about the duration of the course. If the firm tries to sell you a crash course lasting a week, stay away. Day trading is not all that simple and don’t opt for courses which are do not run for at least a month. Be sure that they provide you with enough simulated training on trading so that at the end of your course you are ready to trade confidently in the real market.
• Obviously you got to find out what kind of an infrastructure the firm has in place and whether they will be providing you with the best software platforms and hardware tools available.
• Clarify if the firm is providing you with just a basic course on trading or they have course hours set aside for risk management strategies, and capital management basics. Such add-ons definitely help later in your career when you plan to trade all by yourself.
Find out if a firm demands a percentage of the profit you make while trading. If they ask for it then stay away from that firm. Better firms will allow you to keep your entire profit with you.
best of luck...
Day trading
What the Day trading is? We are going to discuss with you what Day trading actually is? Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market close for the trading day.
The Traders that participate in day trading are called active traders or day traders.
Let us talk about the instruments of Day trading. Most commonly day-traded financial instruments are stocks, stock options, currencies, and a host of futures contracts such as equity index futures, interest rate futures, and commodity futures.
Day trading used to be the preserve of financial firms and professional investors and speculators. Now question arise who are most common day traders? Many day traders are bank or investment firm employees working as specialists in equity investment and fund management. However, with the advent of electronic trading and margin trading, day trading has become increasingly popular among casual, at home traders also.
The Traders that participate in day trading are called active traders or day traders.
Let us talk about the instruments of Day trading. Most commonly day-traded financial instruments are stocks, stock options, currencies, and a host of futures contracts such as equity index futures, interest rate futures, and commodity futures.
Day trading used to be the preserve of financial firms and professional investors and speculators. Now question arise who are most common day traders? Many day traders are bank or investment firm employees working as specialists in equity investment and fund management. However, with the advent of electronic trading and margin trading, day trading has become increasingly popular among casual, at home traders also.
Using the Best FOREX Chart Indicator
For being successful you must have control over your investments using the best FOREX chart indicator. There are a lot of trading indicators that you can use, and not a single one will stand out above the rest. You need to use a combination of two or more trading indicators to be effective in a given circumstance and the mix of which will also vary, depending on the factors available in the current forex market.
Simple bar charts have long lost their popularity. But whether you believe it or not, they are still quite an effective tool, especially over the candlestick charts that present data like the daily open and close range that is already obvious.
how to make larger profits? this is the question which every investor have in his mind. With these four trading indicators that you can probably learn how to use in about thirty minutes each, you will be able to apply right away on your FOREX charts to plan out strategies.
1. The Stochastic is a very powerful trade indicator. It shows you the crossovers of bullish and bearish divergence of oversold and overbought levels. It also enables you to make those precise timings when the best time to trade is available for a particular currency.
2. Relative Strength Index shows you how high the trend can go by graphing when the RSI strengthens and weakens, so it acts as an advance warning for a move against you. Matched together in combination with the stochastic, these two make a powerful pair for establishing the proper timing in the market trend.
3. The Bollinger Bands show you the volatile price levels of a currency. Understanding how this properly works can help you achieve how to make decent earnings in the FOREX market.
You can use pops on the outer band, close to chart resistance and support, to check profit, or create an opposing trend. If there is a strong market trend, you will be able to see dips down the centre band of the moving average. These are areas of great value that you can add more possible watches to an upcoming trend.
These are the long term investments that you do not rush into.
4. Simple Moving Averages pertain to taking the average out of a certain period of days for analysis of long-term trends. A good basis for this sample would be between 18- to 25- day cycles.
Best selection of Forex charts can make a huge profit for you. Forex is the business where you earn huge profit while having good sense of market but if you are stranger in this field, then it can cause a big loss.
Simple bar charts have long lost their popularity. But whether you believe it or not, they are still quite an effective tool, especially over the candlestick charts that present data like the daily open and close range that is already obvious.
how to make larger profits? this is the question which every investor have in his mind. With these four trading indicators that you can probably learn how to use in about thirty minutes each, you will be able to apply right away on your FOREX charts to plan out strategies.
1. The Stochastic is a very powerful trade indicator. It shows you the crossovers of bullish and bearish divergence of oversold and overbought levels. It also enables you to make those precise timings when the best time to trade is available for a particular currency.
2. Relative Strength Index shows you how high the trend can go by graphing when the RSI strengthens and weakens, so it acts as an advance warning for a move against you. Matched together in combination with the stochastic, these two make a powerful pair for establishing the proper timing in the market trend.
3. The Bollinger Bands show you the volatile price levels of a currency. Understanding how this properly works can help you achieve how to make decent earnings in the FOREX market.
You can use pops on the outer band, close to chart resistance and support, to check profit, or create an opposing trend. If there is a strong market trend, you will be able to see dips down the centre band of the moving average. These are areas of great value that you can add more possible watches to an upcoming trend.
These are the long term investments that you do not rush into.
4. Simple Moving Averages pertain to taking the average out of a certain period of days for analysis of long-term trends. A good basis for this sample would be between 18- to 25- day cycles.
Best selection of Forex charts can make a huge profit for you. Forex is the business where you earn huge profit while having good sense of market but if you are stranger in this field, then it can cause a big loss.
What are the Best Times to Trade Forex?
Forex trading market is open almost 24 hours which gives it the flexibility unlike other investments. However, what are the best times to trade? It actually depends on which currencies that you want to trade in.
Firstly, the market is open between 0800 GMT and ends at 2200 GMT. During this period, the trade goes on around the world or as we know it, the office hours of every country. The time when most profits and losses are made is between 1300 GMT to 1600 GMT. So, if you want more selections this period will be the best to make your trade. Still, there are a few sessions that you can choose from.
What are the Best Times to Trade Forex Online?
Asian Session - Asian session is generally a slow moving one. However, with the current economy recession, it is best to do your own research and find out the pairs that can gain the most profit for you.
US Session - US session is often the most active and starts around 1300 GMT. Some currencies that are active are USD and EUR. However, watch out for yourself after the severe economic downturn in US.
London Session - London session starts around 0800 GMT and ends at 1600GMT. Some noted currencies would be the same as US.
On the last note, the best time to trade is between 1300GMT to 1600GMT. Around this time, most currency traders will make their trade and you will be able to choose from a variety of currencies. Even most of the vital news comes out during this period and you should not miss out on all the happenings in the forex market.
Firstly, the market is open between 0800 GMT and ends at 2200 GMT. During this period, the trade goes on around the world or as we know it, the office hours of every country. The time when most profits and losses are made is between 1300 GMT to 1600 GMT. So, if you want more selections this period will be the best to make your trade. Still, there are a few sessions that you can choose from.
What are the Best Times to Trade Forex Online?
Asian Session - Asian session is generally a slow moving one. However, with the current economy recession, it is best to do your own research and find out the pairs that can gain the most profit for you.
US Session - US session is often the most active and starts around 1300 GMT. Some currencies that are active are USD and EUR. However, watch out for yourself after the severe economic downturn in US.
London Session - London session starts around 0800 GMT and ends at 1600GMT. Some noted currencies would be the same as US.
On the last note, the best time to trade is between 1300GMT to 1600GMT. Around this time, most currency traders will make their trade and you will be able to choose from a variety of currencies. Even most of the vital news comes out during this period and you should not miss out on all the happenings in the forex market.
How To Choose a Forex Broker?
Finding the BEST FOREX BROKER is quite difficult. The basic knowledge you need to have is few basic qualities of a good and effectively working forex broker. The basic qualities are enumerated to help you to invest and do well through a FOREX BROKER.
Whether forex broker is regulated or not? and their compliance which shows their integrity and discipline.
Reliable and round the clock customer support help desk.
The list of currencies the broker trade on. Currencies like the Australian, Canadian and US dollars, the Euro, British Pound, Japanese Yen, Rupees, etc. Also how they work in accordance with the operating hours of the Global Forex market.
There are lots of online brokers that offer comprehensive research; various demo programs, innovative and user friendly trading platforms with one click execution, and some forex brokers allow to start trading with as low amount as $25.
The Best Forex Brokers are characterized by their deep awareness of the techniques of money management. Trading signals understanding, possibility to analyze any market conditions rapid changes, and various market factors comprehension, such as interest rates are the criterion of this characteristic. Traders provided with such information carry out their trades consistently using these time-tested methods. Best Forex Brokers maintain very high standards of service, allowing traders to focus on trading opportunities in the forex market, while helping them control their margin and liquidity risk along with timely and effective customer support. There is no broker that is 100% perfect including the top rated Best Forex Brokers worldwide. Before you start dealing with any online Forex Broker it is strongly recommended to find out everything about the Forex Broker and try a demo.
Check out the top rated Forex Brokers at http://forextradingoverview.com/best-forex-brokers/
Whether forex broker is regulated or not? and their compliance which shows their integrity and discipline.
Reliable and round the clock customer support help desk.
The list of currencies the broker trade on. Currencies like the Australian, Canadian and US dollars, the Euro, British Pound, Japanese Yen, Rupees, etc. Also how they work in accordance with the operating hours of the Global Forex market.
There are lots of online brokers that offer comprehensive research; various demo programs, innovative and user friendly trading platforms with one click execution, and some forex brokers allow to start trading with as low amount as $25.
The Best Forex Brokers are characterized by their deep awareness of the techniques of money management. Trading signals understanding, possibility to analyze any market conditions rapid changes, and various market factors comprehension, such as interest rates are the criterion of this characteristic. Traders provided with such information carry out their trades consistently using these time-tested methods. Best Forex Brokers maintain very high standards of service, allowing traders to focus on trading opportunities in the forex market, while helping them control their margin and liquidity risk along with timely and effective customer support. There is no broker that is 100% perfect including the top rated Best Forex Brokers worldwide. Before you start dealing with any online Forex Broker it is strongly recommended to find out everything about the Forex Broker and try a demo.
Check out the top rated Forex Brokers at http://forextradingoverview.com/best-forex-brokers/
FOREX Market
The foreign exchange market (forex market) trades currencies. It lets banks and other institutions easily buy and sell currencies. [1]
The purpose of the foreign exchange market is to help international trade and investment. A foreign exchange market helps businesses convert one currency to another. For example, it permits a U.S. business to import European goods and pay Euros, even though the business's income is in U.S. dollars.
In a typical foreign exchange transaction a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market started forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.
The foreign exchange market is unique because of
its trading volumes,
the extreme liquidity of the market,
its geographical dispersion,
its long trading hours: 24 hours a day except on weekends (from 22:00 UTC on Sunday until 22:00 UTC Friday),
the variety of factors that affect exchange rates.
the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)
the use of leverage
As such, it has been referred to as the market closest to the ideal perfect competition, notwithstanding market manipulation by central banks.[citation needed] According to the Bank for International Settlements,[2] average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. Trading in the world's main financial markets accounted for $3.21 trillion of this. This approximately $3.21 trillion in main foreign exchange market turnover was broken down as follows:
$1.005 trillion in spot transactions
$362 billion in outright forwards
$1.714 trillion in foreign exchange swaps
$129 billion estimated gaps in reporting
The purpose of the foreign exchange market is to help international trade and investment. A foreign exchange market helps businesses convert one currency to another. For example, it permits a U.S. business to import European goods and pay Euros, even though the business's income is in U.S. dollars.
In a typical foreign exchange transaction a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market started forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.
The foreign exchange market is unique because of
its trading volumes,
the extreme liquidity of the market,
its geographical dispersion,
its long trading hours: 24 hours a day except on weekends (from 22:00 UTC on Sunday until 22:00 UTC Friday),
the variety of factors that affect exchange rates.
the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)
the use of leverage
As such, it has been referred to as the market closest to the ideal perfect competition, notwithstanding market manipulation by central banks.[citation needed] According to the Bank for International Settlements,[2] average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. Trading in the world's main financial markets accounted for $3.21 trillion of this. This approximately $3.21 trillion in main foreign exchange market turnover was broken down as follows:
$1.005 trillion in spot transactions
$362 billion in outright forwards
$1.714 trillion in foreign exchange swaps
$129 billion estimated gaps in reporting
Article on Forex Trading
Forex Trading stands for FOREIGN EXCHANGE TRADING.
FOReign EXchange market (forex market)becomes one of the most attractive instruments for investment.
Forex boundless opportunities, such as absolute liquidity, round-the-clock operation, global scale, up-to-date technologies have created a unique profession -Foreign Exchange Trader.
However, the art of making money using Forex trading, despite its simplicity, is not an easy matter.
Forex is the exchange you can buy and sell currencies. For example, you might buy British pounds (by exchanging them to the dollars you had), then, after pounds / dollar ratio goes up, you sell pounds and buy dollars again. At the end of this operation you are going to have more dollars, then you had at the beginning.
The Forex market has much higher liquidity, then the stock market, as much more money is being exchanged. Forex is spread between banks all over the planet and as a result it means 24 hour trading.
Unlike stocks, Forex trades are performed with high leverage, usually it is 100. It means that by investing $1000 you can control $100,000, and increase potential profits accordingly. Some brokers provide also so called mini-Forex, where the size of minimum deposit equals $100. It makes possible for individuals to enter this market easily.
The name convention. In Forex, the name of a "symbol" is composed of two parts — one for first currency, and another for the second currency. For example, the symbol usdjpy stands for US dollars (usd) to Japanese yen (jpy).
As with stocks, you can apply tools of the technical analysis to Forex charts. Trader's indexes can be optimized for Forex "symbols", allowing you to find winning strategy.
Example Forex transaction
Assume you have a trading account of $25,000 and you are trading with a 1% margin requirement. The current quote for EUR/USD is 1.3225/28 and you place a market order to buy 1 lot of 100,000 Euros at 1.3228, expecting the euro to rise against the dollar. At the same time you place a stop-loss order at 1.3178 representing a maximum loss of 2% of your account equity if the trade goes against you, 50 pips below your order price, and a limit order at 1.3378, 150 pips above your order price. For this trade, you are risking 50 pips to gain 150 pips, giving you a risk/reward ratio of 1 part risk to 3 parts reward. This means that you only need to be right one third of the time to remain profitable.
The notional value of this trade is $132,280 (100,000 * 1.3228). Your required margin deposit is 1% of the total, which is equal to $1322.80 ($132,280 * 0.01).
the Euro strengthens against the dollar and your limit order is reached at 1.3378. The position is closed. Your total profit for this trade is $1500, each pip being worth $10.
FOReign EXchange market (forex market)becomes one of the most attractive instruments for investment.
Forex boundless opportunities, such as absolute liquidity, round-the-clock operation, global scale, up-to-date technologies have created a unique profession -Foreign Exchange Trader.
However, the art of making money using Forex trading, despite its simplicity, is not an easy matter.
Forex is the exchange you can buy and sell currencies. For example, you might buy British pounds (by exchanging them to the dollars you had), then, after pounds / dollar ratio goes up, you sell pounds and buy dollars again. At the end of this operation you are going to have more dollars, then you had at the beginning.
The Forex market has much higher liquidity, then the stock market, as much more money is being exchanged. Forex is spread between banks all over the planet and as a result it means 24 hour trading.
Unlike stocks, Forex trades are performed with high leverage, usually it is 100. It means that by investing $1000 you can control $100,000, and increase potential profits accordingly. Some brokers provide also so called mini-Forex, where the size of minimum deposit equals $100. It makes possible for individuals to enter this market easily.
The name convention. In Forex, the name of a "symbol" is composed of two parts — one for first currency, and another for the second currency. For example, the symbol usdjpy stands for US dollars (usd) to Japanese yen (jpy).
As with stocks, you can apply tools of the technical analysis to Forex charts. Trader's indexes can be optimized for Forex "symbols", allowing you to find winning strategy.
Example Forex transaction
Assume you have a trading account of $25,000 and you are trading with a 1% margin requirement. The current quote for EUR/USD is 1.3225/28 and you place a market order to buy 1 lot of 100,000 Euros at 1.3228, expecting the euro to rise against the dollar. At the same time you place a stop-loss order at 1.3178 representing a maximum loss of 2% of your account equity if the trade goes against you, 50 pips below your order price, and a limit order at 1.3378, 150 pips above your order price. For this trade, you are risking 50 pips to gain 150 pips, giving you a risk/reward ratio of 1 part risk to 3 parts reward. This means that you only need to be right one third of the time to remain profitable.
The notional value of this trade is $132,280 (100,000 * 1.3228). Your required margin deposit is 1% of the total, which is equal to $1322.80 ($132,280 * 0.01).
the Euro strengthens against the dollar and your limit order is reached at 1.3378. The position is closed. Your total profit for this trade is $1500, each pip being worth $10.
What Is FOREX And How Does It Work?
FOREX stands for Foreign Exchange. The Foreign Exchange market is the biggest and largest financial market in the world. FOREX has a daily average turnover of US$1.9 trillion.
FOREX can be defined as Forex is the simultaneous buying of one currency and selling of another. In FOREX, Currencies are traded in pairs, for example Euro/US Dollar (EUR/USD) or US Dollar/Japanese Yen (USD/JPY). So basically, Forex is trading.
There are two reasons to buy and sell currencies. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency.
The other 95% is trading for profit, or what you call speculation. Investors frequently trade on information they believe to be superior and relevant, when in fact it is not and is fully discounted by the FOREX market.
On one side of each speculative stock trade is a participant who believes he has superior information and on the other side is another participant who believes his information is superior.
For speculators, the best FOREX trading opportunities are with the most commonly traded (and therefore most liquid- meaning its in cash or convertible to cash) currencies, called "the Majors." Today, more than 85% of all daily transactions involve trading of the Majors.
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 — real time- day or night.
The Forex market is considered an Over The Counter (OTC) or 'interbank' market. This is because the transactions are conducted between two counterparts over the telephone or via an electronic network. Trading is not centralized on an exchange compared to stocks and futures markets.
Understanding FOREX quotes :
Reading a Forex quote may seem a bit confusing at first. However, it's really quite simple if you remember two things:
1) The first currency listed first is the base currency and
2) the value of the base currency is always 1.
The US dollar is the centerpiece of the Forex market and is normally considered the 'base' currency for quotes. In the "Majors", 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/JPY 110.01 means that one U.S. dollar is equal to 110.01 Japanese yen.
When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote we previously mentioned increases to 113.01, the dollar is stronger because it will now buy more yen than before.
The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as GBP/USD 1.7366, meaning that one British pound equals 1.7366 U.S. dollars.
In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar.
In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.
Currency pairs that do not involve the U.S. dollar are called cross currencies, but the premise is the same. For example, a quote of EUR/JPY 127.95 signifies that one Euro is equal to 127.95 Japanese yen.
When trading Forex you will often see a two-sided quote, consisting of a 'bid' and 'offer'. 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).
FOREX can be defined as Forex is the simultaneous buying of one currency and selling of another. In FOREX, Currencies are traded in pairs, for example Euro/US Dollar (EUR/USD) or US Dollar/Japanese Yen (USD/JPY). So basically, Forex is trading.
There are two reasons to buy and sell currencies. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency.
The other 95% is trading for profit, or what you call speculation. Investors frequently trade on information they believe to be superior and relevant, when in fact it is not and is fully discounted by the FOREX market.
On one side of each speculative stock trade is a participant who believes he has superior information and on the other side is another participant who believes his information is superior.
For speculators, the best FOREX trading opportunities are with the most commonly traded (and therefore most liquid- meaning its in cash or convertible to cash) currencies, called "the Majors." Today, more than 85% of all daily transactions involve trading of the Majors.
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 — real time- day or night.
The Forex market is considered an Over The Counter (OTC) or 'interbank' market. This is because the transactions are conducted between two counterparts over the telephone or via an electronic network. Trading is not centralized on an exchange compared to stocks and futures markets.
Understanding FOREX quotes :
Reading a Forex quote may seem a bit confusing at first. However, it's really quite simple if you remember two things:
1) The first currency listed first is the base currency and
2) the value of the base currency is always 1.
The US dollar is the centerpiece of the Forex market and is normally considered the 'base' currency for quotes. In the "Majors", 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/JPY 110.01 means that one U.S. dollar is equal to 110.01 Japanese yen.
When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote we previously mentioned increases to 113.01, the dollar is stronger because it will now buy more yen than before.
The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as GBP/USD 1.7366, meaning that one British pound equals 1.7366 U.S. dollars.
In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar.
In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.
Currency pairs that do not involve the U.S. dollar are called cross currencies, but the premise is the same. For example, a quote of EUR/JPY 127.95 signifies that one Euro is equal to 127.95 Japanese yen.
When trading Forex you will often see a two-sided quote, consisting of a 'bid' and 'offer'. 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).
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