The currency of one country is weighed against the currency of another country to decide value. The measure of that foreign currency is taken into consideration when trading stocks on the FOREX markets. Most countries have control over the value of that countries value, involving the currency, or money. Those who are often involved in the FOREX markets include banks, large businesses, governments, and financial institutions.A forex market trade is one that involves at least two countries, and it can take place worldwide.
The two countries are one, with the investor, and two, the country the money is being invested in. Most all transactions taking place in the FOREX market are going to take place through a broker, such as a bank.The foreign exchange market is made up of a variety of transactions and counties. Those involved in the FOREX market are trading in large volumes, large amounts of money. Those who are involved in the FOREX market are generally involved in cash businesses, or in the trade of very liquid assets that you can sell and buy fast. The market is very large. You could consider the FOREX market to be much larger than the stock market in any one country overall.
Those involved in the FOREX market are trading every day twenty-four hours a day and sometimes trading is completed on the weekend, but not all weekends.You may be surprised at the number of people that are involved with in FOREX trading. In the years 2004, nearly two trillion dollars was an average daily trading volume. This is a huge number for the number of daily transactions to take place. Think about how much a trillion dollars really is and then times that by two, and this is the money that is changing hands every day!
The FOREX market is not something new, but has been used for over thirty years. With the creation of computers, and then the internet, the trading on the FOREX market continues to grow as increasingly people and businesses alike become aware of the availablily of this trading market. FOREX only accounts for about ten percent of the total trading from country to country, but as the popularity in this market keeps to grow so could that number.
Online FOREX trading
Online FOREX trading is a huge business
The Foreign Exchange Market better known as FOREX - is a world wide market for buying and selling currencies. It handles a huge volume of transactions 24 hours a day, 5 days a week. Daily exchanges are worth approximately $1.5 trillion (US dollars). In comparison, the United States Treasury Bond market averages $300 billion a day and American stock markets exchange about $100 billion a day.he Foreign Exchange Market Established
The Foreign Exchange Market was established in 1971 with the abolishment of fixed currency exchanges. Currencies became valued at 'floating' rates determined by supply and demand. The FOREX grew steadily throughout the 1970's, but with the technological advances of the 80's FOREX grew from trading levels of $70 billion a day to the current level of $1.5 trillion.
The FOREX is made up of about 5000 trading institutions such as international banks, central government banks (such as the US Federal Reserve), and commercial companies and brokers for all types of foreign currency exchange. There is no centralized location of FOREX major trading centers are located in New York, Tokyo, London, Hong Kong, Singapore, Paris, and Frankfurt, and all trading is by telephone or over the Internet. Businesses use the market to buy and sell products in other countries, but most of the activity on the FOREX is from currency traders who use it to generate profits from small movements in the market.
Even though there are many huge players in FOREX, it is accessible to the small investor thanks to recent changes in the regulations. Previously, there was a minimum transaction size and traders were required to meet strict financial requirements. With the advent of Internet trading, regulations have been changed to allow large interbank units to be broken down into smaller lots. Each lot is worth about $100,000 and is accessible to the individual investor through 'leverage' – loans extended for trading. Typically, lots can be controlled with a leverage of 100:1 meaning that US$1,000 will allow you to control a $100,000 currency exchange.There are many advantages to trading in FOREX.
Non-bank Foreign Exchange Companies
Non-bank foreign exchange companies offer currency exchange and international payments to private individuals and companies. These are also known as foreign exchange brokers but are distinct in that they do not offer speculative trading but currency exchange with payments. I.e., there is usually a physical delivery of currency to a bank account.
It is estimated that in the UK, 14% of currency transfers/payments are made via Foreign Exchange Companies. These companies' selling point is usually that they will offer better exchange rates or cheaper payments than the customer's bank. These companies differ from Money Transfer/Remittance Companies in that they generally offer higher-value services.
Liquidity - Because of the size of the Foreign Exchange Market, investments are extremely liquid. International banks are continuously providing bid and ask offers and the high number of transactions each day means there is always a buyer or a seller for any currency.Accessibility The market is open 24 hours a day, 5 days a week. The market opens Monday morning Australian time and closes Friday afternoon New York time.
Trades can be done on the Internet from your home or office.Open Market Currency fluctuations are usually caused by changes in national economies. News about these changes is accessible to everyone at the same time there can be no 'insider trading' in FOREX.No commission Brokers earn money by setting a 'spread' the difference between what a currency can be bought at and what it can be sold at.
Forex optionsThe options of forex have much in common with the businesses of stock market. They are more reliable by limiting risks and by raising the benefit during the trade of the market. An investor can choose between two principal options, the first of which is traditional. He leaves the purchaser the good currency of purchase at the price and time preconcerted but doesn 't to encourage it to do that. If a tradesman seizes the occasion of the options of forex and during agreed time the currency being bought appreciates, the tradesman can sell this currency with the advantage. The options of forex give to investors another tool which them assistance to reduce to the maximum of the losses and to raise benefit, they are extremely popular at the periods of the economic report. But if the currency underestimates loses of a tradesman whom they pay the premium this option.
The second type of options of forex is called SPOT (option dealings of simple payment). This type depends on the tradesman of forex; it is a forecast of the tradesman on what they provide will occur on the market of forex. If the tradesman is made a success of the possible benefit can be unlimited and if the SPOT not is successful the tradesman loses only the premium.
The transactions in options on FOREX are extremely risky. The options of the 'salesmen and the purchasers should become with the current of the type of option which they envisage to trade and of the risks connected with him.
He 's interesting to appear outside the point to which the value of the options must go up so that the position remains salutary, fascinating of account all the costs of transaction and, naturally, the premium.
The options 'purchasing can compensate for or exert the options or let the options expire. The exercise of an option has in payment in cash or like consequence the purchaser obtaining or giving the basic interest. If the options which you bought expire without value, you lose the investment which includes/understands the premium of option. If the option is on a powerful position, the purchaser receives a position of opening of FOREX with responsibilities associated with margin. You should remember that the costs of transaction on FOREX are usually zero without the commission. If you intend to buy deep-outside-of-the-money options, you should realize that the possibility of obtaining the benefit of such options is usually rather distant.
In general, the sale of, granting or writing option are riskier than options to buy. The salesman can confirm a loss above this quantity though there 'sA fixed the level of the best quality put at the current by the salesman. The salesman is responsible for a additional-margin to keep the position on the same level if the market moves without success.
The salesman also meets a risk of the purchaser employing the option and the salesman will have to arrange the option cash, to obtain or provide the basic interest. If the option is covered by the salesman of a corresponding position in the basic interest or a future or a different option the risk can be less. If the option is on a powerful position the salesman receives an open position of FOREX with associate put in margin responsibilities. If the option isn 't covered the risk of loss is unlimited.
In some authorities the brokers left the payment given to later of the premium of option, bringing the purchaser to the responsibility for the payments of margin isn 't then the quantity of best quality. He 's still possible that the purchaser loses the costs of premium and transaction. The purchaser is responsible for any unpaid premium which is already late when the option is exerted or expires. The stockmarket is often associated with the options; the market of foreign currencies (of FOREX) leaves always also commercial these single derivatives. Retail dealers much of occasions to the minimum to reduce the risk and to increase grace of benefit with the options.
Benefits of Trading in the Forex Market
Investors and entrepreneurs are moving away from conventional financial markets such as commodities futures, bonds, stocks and other commodities and prefer to invest their money in the Forex market. The reason behind this migration is due the fact that the Forex market has lucrative and far better benefits when compared to any other type of financial market.
The power of Forex market is such that even a seasoned Commodities or Stocks trader will find out in a short time the advantages of Forex over their traditional trading avenues. It is possible for you to make up to $3000 by trading in the Forex market for just 30 minutes everyday. When compared to futures market, trading currencies in Forex market involves less risk. It is also far easier and more profitable than trading stocks.
Following are some of the benefits of trading in the Forex market.
• The most unique feature of Forex market is that it is open 24 hours a day. Unlike trading stocks where you have to wait for an opening bell, you can buy or sell currencies whenever you want in the Forex market. This also gives you the added advantage of choosing the right time to make your transactions.
• Forex market has a huge trading volume in the range of about $1.5 trillion. The Forex market is about 30 times larger than all of the U.S equity markets put together.
• As far as Forex day trading is concerned, you can make a profit out of a raising market, as well as from a falling market. This is because you have the power to decide whether to buy or sell a currency after carefully analyzing the market trend.
• You can trade in the Forex market from anywhere in the world. If you have a computer with an internet connection, you can make your transactions from anywhere.
• Forex trading requires considerably less initial investment. You can even start your Forex career with an investment of as low as $300. Once you learn the ropes of the trade and make a success out of your strategy, you can increase your trade up to 200 times your initial investment. Moreover in Forex market you just need to post a meagre 1% margin when compared to a 50% margin in the stock market.
• The price movements are easily predictable in the Forex market. Though the price movement themselves are highly volatile, the foreign currency market follows a pattern that is easily predictable with proper technical analysis.
• In Forex trading you don’t have to pay any commissions to brokers on transactions.
To sum it up, Forex trading has far more advantageous than other trading platforms and gives you more control over the features and freedom to choose. You can make huge profits if you know what you are doing.
World Market Watch
| Exchange | Last | Change |
 DJIA® * | 0 | 0 |
| Nasdaq | 2370.75 | 2.13 |
| S & P 500 | 1146.24 | 5.04 |
 MerVal | 2652.29 | 8.87 |
 Bovespa | 70229.35 | 799.57 |
 TSX | 12363.08 | -5.57 |
 IPC | 33807.48 | 477.14 |
 AEX | 333.78 | -0.61 |
 FTSE 100 | 5592.90 | 44.28 |
 DAX | 6211.34 | -17.68 |
 CAC 40 | 3692.09 | -23.09 |
 Nikkei | 9404.23 | 34.88 |
 Hang Seng | 22358.17 | -20.50 |
 Shanghai | 2655.65 | 44.98 |
 Straits | 3130.90 | 33.27 |
 Jakarta | 3547.11 | 45.81 |
 NZX 50 | 3212.93 | 34.84 |
 TSEC | 8244.18 | 6.40 |
 Sensex | 20445.03 | 375.92 |
| Nifty | 6143.40 | 113.4 |
No comments:
Post a Comment