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Posted by
NeWs : )
Wednesday, October 14, 2009
In recent years market makers have allowed substantial growth and participation of private investors in a broad cross-section of markets. These markets are now more accessible than ever and allow the everyday person to reap rewards once only available to large financial institutions.
The largest of all markets, the Foreign Currency Market, only became available to trade in its current format in 2002 and for this reason is largely unknown. For the educated trader, Forex can be a treasure chest.
The Forex market is open 24 hours, 5.5 days a week, giving enormous flexibility to work and lifestyle.
The decentralised clearing of trades and overlap of major markets in Asia, Europe and the United States, means the market remains open and liquid throughout the day and overnight.
In comparison, equity trading for example, floor trading hours are limited and dictated by the time zone of the trading location thus restricting the time a particular market is open and when it can be accessed.
The Forex is the most liquid market in the world…transactions are continuous since currency exchange is a required mechanism needed to facilitate world commerce.
Forex is also a well leveraged market with ratios as high as 400:1 and having the right education ensures the proper equity management strategies are employed to maximize success.
World Forex will teach you how to trade these markets effectively, with strategies proven over generations of traders.
The largest of all markets, the Foreign Currency Market, only became available to trade in its current format in 2002 and for this reason is largely unknown. For the educated trader, Forex can be a treasure chest.
The Forex market is open 24 hours, 5.5 days a week, giving enormous flexibility to work and lifestyle.
The decentralised clearing of trades and overlap of major markets in Asia, Europe and the United States, means the market remains open and liquid throughout the day and overnight.
In comparison, equity trading for example, floor trading hours are limited and dictated by the time zone of the trading location thus restricting the time a particular market is open and when it can be accessed.
The Forex is the most liquid market in the world…transactions are continuous since currency exchange is a required mechanism needed to facilitate world commerce.
Forex is also a well leveraged market with ratios as high as 400:1 and having the right education ensures the proper equity management strategies are employed to maximize success.
World Forex will teach you how to trade these markets effectively, with strategies proven over generations of traders.
Labels:
The market
Posted by
NeWs : )
Foreign exchange of currencies can be dated back to ancient times, when merchants of different sorts traded coins from country to country. In ancient Egypt the first coins were used, and paper notes were added later on by the Babylonians. The history of Forex continues in the middle ages when foreign exchange was maintained by international banks. This enabled a growth of the European powers and contributed to the spread of foreign currencies throughout Europe and the middle east. The history of Forex is therefore perhaps the longest of all the other markets, and this is one of the advantages of Forex over other market options.
1816-The Gold Standard Changes Forex History
The gold standard was a trading standard that was used as a fixed value for trading commodities. This means a certain weight in gold was established and used to trade for other currencies. This started to be in use in 1816, when the British pound was defined as 123.27 grains of gold. This meant that the British banks had a specific value that was defined and this in turn helped set the UK standard currency as stable.
Simplified..
The strength of a country's currency depended on the amount of gold reserves the country maintained. So, if country A's gold reserves are double the gold reserves of country B, country A's currency would be twice in value when exchanged with the currency of country B.
The US and the rest of the world adopted the gold standard by 1880. Under the gold exchange, currencies gained a new phase of stability as they were backed by the price of gold. But the gold exchange standard didn’t lack faults. As an economy strengthened, it would import heavily from abroad until it ran down its gold reserves required to back its money; consequently, the money supply would shrink, interest rates rose and economic activity slowed to the extent of recession. Ultimately, prices of goods had hit bottom, appearing attractive to other nations, who would rush into buying sprees that injected the economy with gold until it increased its money supply, and drive down interest rates and recreate wealth into the economy. Such boom-bust patterns prevailed throughout the gold standard until the outbreak of World War I interrupted trade flows and the free movement of gold and the European nations stopped using the gold standard.
Up until WWII, Great Britain's currency, the Great British Pound, was the major currency by which most currencies were compared. This changed when the Nazi campaign against Britain included a major counterfeiting effort against its currency. The UK had suffered a great financial blow and its economical state was disastrous. In fact, WWII vaulted the U.S. dollar from a failed currency after the stock market crash of 1929 to a benchmark currency by which most other international currencies were compared.
At a conference held at Bretton Woods in New Hampshire in 1944, a new international financial framework was introduced specifically to stabilize world trade and the global economic situation. Particularly affected were Europe and Japan.
1816-The Gold Standard Changes Forex History
The gold standard was a trading standard that was used as a fixed value for trading commodities. This means a certain weight in gold was established and used to trade for other currencies. This started to be in use in 1816, when the British pound was defined as 123.27 grains of gold. This meant that the British banks had a specific value that was defined and this in turn helped set the UK standard currency as stable.
Simplified..
The strength of a country's currency depended on the amount of gold reserves the country maintained. So, if country A's gold reserves are double the gold reserves of country B, country A's currency would be twice in value when exchanged with the currency of country B.
The US and the rest of the world adopted the gold standard by 1880. Under the gold exchange, currencies gained a new phase of stability as they were backed by the price of gold. But the gold exchange standard didn’t lack faults. As an economy strengthened, it would import heavily from abroad until it ran down its gold reserves required to back its money; consequently, the money supply would shrink, interest rates rose and economic activity slowed to the extent of recession. Ultimately, prices of goods had hit bottom, appearing attractive to other nations, who would rush into buying sprees that injected the economy with gold until it increased its money supply, and drive down interest rates and recreate wealth into the economy. Such boom-bust patterns prevailed throughout the gold standard until the outbreak of World War I interrupted trade flows and the free movement of gold and the European nations stopped using the gold standard.
Up until WWII, Great Britain's currency, the Great British Pound, was the major currency by which most currencies were compared. This changed when the Nazi campaign against Britain included a major counterfeiting effort against its currency. The UK had suffered a great financial blow and its economical state was disastrous. In fact, WWII vaulted the U.S. dollar from a failed currency after the stock market crash of 1929 to a benchmark currency by which most other international currencies were compared.
At a conference held at Bretton Woods in New Hampshire in 1944, a new international financial framework was introduced specifically to stabilize world trade and the global economic situation. Particularly affected were Europe and Japan.
Labels:
The History of Forex
Posted by
NeWs : )
The World Bank and the International Monetary Fund are collectively known as the Bretton Woods Institutions. Under the Bretton Woods Exchange System, the base currency, being the US Dollar, was pegged to the value of gold at a rate of $35 per ounce. Other currencies were then pegged to the US Dollar and allowed to fluctuate 1% either way. However, this fixed exchange rate system allowed any country to devalue or revalue its currency to fulfill the local financial and economic needs, particularly to make their exports more competitive in the global market. The massive US balance of payments deficits of early 1960's began casting shadows of doubt in the strength of the US dollar.
During the same decade, the currency crisis in Europe, mainly in the United Kingdom, France and Germany brought about the end of the Bretton Woods accord.
The United States, under president Nixon, reacted in 1971 by devaluing the dollar and forcing realignment of currencies with the dollar. The Bretton Woods Accord was thereby replaced by the Smithsonian Agreement. It was similar to the Bretton Woods Accord in that it worked on a fixed rate but was not backed by gold and also allowed for a 2.5% fluctuation instead of the previous 1%.
In 1972, the European community tried to move away from its dependency on the dollar. The European Joint Float was established by West Germany, France, Italy, the Netherlands, Belgium and Luxemburg. The agreement was similar to the Bretton Woods Accord, but allowed a greater range of fluctuation in the currency values.
Both agreements made mistakes similar to the Bretton Woods Accord and collapsed. The collapse of the Smithsonian agreement and the European Joint Float in 1973 signified the official switch to the free-floating system. This occurred by default, as there were no new agreements to take their place. Governments were now free to peg their currencies, semi-peg or allow them to freely float. In 1978, the free-floating system was officially mandated.
This market is popularly known as the International Monetary Market or IMM. This IMM is not a single entity. It is a collection of all financial institutions that have any interest in foreign currencies all over the world. Banks, Brokerages, Fund Managers, Government Central Banks and sometimes individuals are just a few examples of these institutions.
In a final effort to gain independence from the dollar, Europe created the European Monetary System in July of 1978. Like all of the previous agreements, it failed in 1993.
Forex History Changes With The Introduction of The Internet.
During 1994, online currency trading made its debut, with the first online Forex transaction done. Since then, the market has grown to what it is today, with a total circle of more than $2.5 trillion every day. The big change in Forex history is that now anyone could participate and invest in the market. The vast amount of people trading online Forex is due mostly to the option of margin investments that are available with online Forex trading.
On January 1, 2002, the history of Forex trading was changed with the introduction of the Euro as the official currency between twelve European nations. The Euro is now the second most frequently traded currency in Forex markets. The countries first added to the Euro currency were: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.
London was, and remains the principal offshore market. In the 1980s, it became the key center in the Eurodollar market when British banks began lending dollars as an alternative to pounds in order to maintain their leading position in global finance. London’s convenient geographical location (operating during Asian and American markets) is also instrumental in preserving its dominance in the Euromarket.
Today, the major currencies, such as the U.S. dollar, Euro, British pound, Swiss franc and the Japanese yen, move independently from other currencies. The currencies are traded by anyone who wishes, including an influx of speculation by banks, hedge funds, brokerage houses and individuals. Only on occasion do some of the central banks intervene to move or attempt to move currencies to their desired levels. The underlying factor that drives today's forex markets, however, is supply and demand. The free-floating system is ideal for today's forex markets. The supply and demand of currencies are driven by three factors, including interest rates and interest rate differentials, commodities and global trade.
The forex market is the prime market of the world by all which all others can be considered derivatives (like futures and options).
With this growing volume, 24 hour convenience, the ability to trade anywhere in the world, ease of access to data and information and the leveraged margin accounts from retail brokers, this market is an ideal trading arena.
During the same decade, the currency crisis in Europe, mainly in the United Kingdom, France and Germany brought about the end of the Bretton Woods accord.
The United States, under president Nixon, reacted in 1971 by devaluing the dollar and forcing realignment of currencies with the dollar. The Bretton Woods Accord was thereby replaced by the Smithsonian Agreement. It was similar to the Bretton Woods Accord in that it worked on a fixed rate but was not backed by gold and also allowed for a 2.5% fluctuation instead of the previous 1%.
In 1972, the European community tried to move away from its dependency on the dollar. The European Joint Float was established by West Germany, France, Italy, the Netherlands, Belgium and Luxemburg. The agreement was similar to the Bretton Woods Accord, but allowed a greater range of fluctuation in the currency values.
Both agreements made mistakes similar to the Bretton Woods Accord and collapsed. The collapse of the Smithsonian agreement and the European Joint Float in 1973 signified the official switch to the free-floating system. This occurred by default, as there were no new agreements to take their place. Governments were now free to peg their currencies, semi-peg or allow them to freely float. In 1978, the free-floating system was officially mandated.
This market is popularly known as the International Monetary Market or IMM. This IMM is not a single entity. It is a collection of all financial institutions that have any interest in foreign currencies all over the world. Banks, Brokerages, Fund Managers, Government Central Banks and sometimes individuals are just a few examples of these institutions.
In a final effort to gain independence from the dollar, Europe created the European Monetary System in July of 1978. Like all of the previous agreements, it failed in 1993.
Forex History Changes With The Introduction of The Internet.
During 1994, online currency trading made its debut, with the first online Forex transaction done. Since then, the market has grown to what it is today, with a total circle of more than $2.5 trillion every day. The big change in Forex history is that now anyone could participate and invest in the market. The vast amount of people trading online Forex is due mostly to the option of margin investments that are available with online Forex trading.
On January 1, 2002, the history of Forex trading was changed with the introduction of the Euro as the official currency between twelve European nations. The Euro is now the second most frequently traded currency in Forex markets. The countries first added to the Euro currency were: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.
London was, and remains the principal offshore market. In the 1980s, it became the key center in the Eurodollar market when British banks began lending dollars as an alternative to pounds in order to maintain their leading position in global finance. London’s convenient geographical location (operating during Asian and American markets) is also instrumental in preserving its dominance in the Euromarket.
Today, the major currencies, such as the U.S. dollar, Euro, British pound, Swiss franc and the Japanese yen, move independently from other currencies. The currencies are traded by anyone who wishes, including an influx of speculation by banks, hedge funds, brokerage houses and individuals. Only on occasion do some of the central banks intervene to move or attempt to move currencies to their desired levels. The underlying factor that drives today's forex markets, however, is supply and demand. The free-floating system is ideal for today's forex markets. The supply and demand of currencies are driven by three factors, including interest rates and interest rate differentials, commodities and global trade.
The forex market is the prime market of the world by all which all others can be considered derivatives (like futures and options).
With this growing volume, 24 hour convenience, the ability to trade anywhere in the world, ease of access to data and information and the leveraged margin accounts from retail brokers, this market is an ideal trading arena.
Labels:
The World Bank
Posted by
NeWs : )
1. What is currency trading?
2. What are the most common currencies in the Forex markets?
3. How is currency traded?
4. What are “short” and “long” positions?
5. What trading strategy should I use?
6. How long should a position be maintained?
7. What is a margin account?
8. How is money made trading currencies?
9. How is pricing determined for certain currencies?
10. What is the difference between Futures and FOREX?
11. Am I buying actual currencies when I trade?
12. What is Day Trading?
13. What percent of people make money on the FOREX?
14. Why do Professional Traders make so much money?
15. Can I become a successful Professional Trader?
16. Is trading a form of gambling?
17. Can I lose everything when trading the FOREX?
18. How can I manage risk?
19. Why don't we hear more about the FOREX?
20. How can I get started?
21. What is good judgment trading?
22. How much money can I earn?
23. What do emotions have to do with it?
24. Are there books I can buy to educate myself?
25. What can World Forex do for me?
1. What is currency trading?
Simply stated, each country has its own currency. Currency trading occurs when one country's currency is traded for another country's currency at the prevailing exchange rate.
2.What are the most common currencies in the Forex markets?
The most “liquid” currencies in the Forex market are those of countries with low inflation, stable governments, and respected central banks. Nearly 85% of daily transactions involve the major currencies, including the U.S. Dollar, Japanese Yen, the European Union Euro, British Pound, Swiss Franc, and the Canadian and Australian Dollars.-
3. How is currency traded?
All currency trading is traded in LOTS. Each lot has a different amount of currency. For example; a Swiss Franc lot has 125,000 Swiss Francs in it. A trader does not buy lots in order to buy and sell it or trade it. A trader opens a margin account, enabling him the right to trade it.
4. What are “short” and “long” positions?
Short positions are taken when a trader sells currency in anticipation of a downturn in price. Making this move allows the investor to benefit from a decline. Long positions are taken when a trader buys a currency at a low price in anticipation of selling it later for more. Making these moves allows the investor to benefit from changing market prices.-
5. What trading strategy should I use?
Both economic fundamentals and technical factors influence the decisions of currency traders. Those who follow economic fundamentals use government issued reports, current news, and broad economic trends to anticipate movements in price. Technical traders rely on trend lines, support and resistance levels, and a variety of charts and mathematical analysis to identify trading opportunities.
6. How long should a position be maintained?
Forex traders generally hold positions until one of three criteria is met:
A sufficient profit has been realized from the position.
A pre-set stop-loss order is triggered.
A better potential position emerges and the trader liquidates funds to take advantage of it.
7. What is a margin account?
A margin account is a bond account. It is like a savings account. Before you can trade, you need to place a certain amount of money in what is called a margin account. You are guaranteeing other traders that you can pay them if you lose. That account is overseen by your broker. He monitors your account when you trade. He usually will not allow you to risk more than what is in your margin account. The margin account exists so, as you win on a daily basis, they have a place to deposit your money. Conversely, when you lose, they have an account to withdraw the money.
8. How is money made trading currencies?
Currencies are traded on a point or pip system. A pip is another word for a point in the currency trading arena. Traders are trying to capture points. Depending on the currency, each point is worth a different amount. For example; the British Pound is worth about $1 per point that is traded per lot. If you trade 1 lot and capture 40 points, you just made $40. If you trade 10 lots and capture 40 points, you just made $4,00.00, etc. (amounts based on a mini account - for a regular account, multiply the dollar amounts by 10)
9. How is pricing determined for certain currencies?
The full range of economic and political conditions impact currency pricing. It is generally held that interest rates, inflation rates and political stability are top among important factors. At times, governments participate in the forex market in order to influence the traded value of their currencies. These and other market factors such as very large orders can cause extreme relative volatility in currency prices. The sheer size of the forex market prevents any single factor from dominating the market for any length of time.
10. What is the difference between Futures and FOREX?
Currencies are the money that represent the monetary system from different countries. For example; the Japanese Yen, Canadian Dollar, Brazilian Real, Swiss Franc, etc. Futures trading of currencies is done in trading pits, where you are trading those currencies today, but for future prices. FOREX trading is trading actual currencies at today's exchange rate with banks. All trades are done through brokers or market makers.
11. Am I buying actual currencies when I trade?
No. With your margin account, you are buying the right to trade one "lot" of a currency. Each lot equals a different amount of currency, depending on the currency being traded verses the US Dollar.
12. What is Day Trading?
Day Trading is when a trader buys and sells his lots or stocks that same day. He is in and out of the market that same day. He does not hold his position overnight or for a week, etc.
13. What percent of people really earn money on the FOREX?
10 % make money, and 90% lose money!
Why?
The 90% who enter the market are driven by emotions such as greed and fear. They lack a sound equity management plan and know very little about the techniques of trading. The fact is they are lacking adequate and proper education for the task at hand.
14. Why do Professional Traders earn so much money?
Most Professional Traders are part of the 10% earning money. The 10% earning money actually receive the 90% money that is lost . If the 90% are paying the 10%, you can easily figure out that the 10% are being paid quite handsomely.
15. Can I become a successful Professional Trader?
Absolutely! Trading is a profession that most anyone can learn. However, it doesn't happen over night or in a few weeks. You must go through the same processes of education and mentoring that all professionals go through. Generally, we are becoming conditioned by numerous national ads into believing that trading is simple. If it is that easy why do we hear the horror stories about day traders? Why do 90% of people lose on the FOREX?
16. Is trading a form of gambling?
All forms of trading and investment can be construed as a form of gambling, although neither are the same as playing the lottery, roulette or betting. Traders seek price fluctuations and investors seek return on investment. Both require a calculated risk that is minimized by knowledge. You are always gambling when you are uneducated, trading emotionally or with a " hot tip".
Calculated risks are taken in all investments. People risk huge sums of money and not every one succeeds. Even when there is a track record of success as in many franchises there is still no guarantee. Their investment becomes a calculated risk.
The FOREX market is no different. When you trade not knowing what you are doing, or off a tip, you are gambling. When you trade after you have been educated or mentored by a successful program, or by other successful traders, you are now taking a calculated risk.
17. Can I lose everything when trading the FOREX?
No. You can't lose everything you own. The under-educated will more than likely lose their margin account. The educated will more than likely capture the loser's margin account money.
18. How can I manage risk?
The most common risk management tools in Forex trading are the stop-loss order and the limit order. The stop-loss order directs that a position be automatically liquidated at a certain price in order to guard against dramatic changes against the position. A limit order sets the maximum price that the investor is willing to pay in a transaction, as well as a minimum price to be received in exchange. The foreign exchange marketplace is so liquid that it is easy to execute stop-loss and limit orders.
19. Why don't we hear more about the FOREX?
Reliable sources indicate that more than 2.5 trillion dollars of currency is traded daily on the FOREX. The majority of the volume historically is generated by major investors, banks, financial institutions and governments. Thanks to the Internet, more and more people like us are beginning to learn of the opportunities and are getting involved.
20. How can I get started?
You need to be very careful and exercise due diligence. There are growing numbers of firms offering various approaches to FOREX trading. Look before you leap. Do your homework and check references. Many companies prey on the greedy promising phenomenal returns that are the exception, not the rule! Find a company that doesn't promise the moon. If it sounds too good to be true, it usually is. Reputable firms have credentials.
Beware of "Black Box" systems. It is against ASIC regulations for a firm to offer any guarantee of performance of any system. What one can guarantee and offer is that their trading methodology is sound, productive and profitable.
Trading decisions should not be made by computer only. A professional trader is a human being, with emotions, intuition and a brain to interpret what the computer tells him/her. A trader is not a computer. A professional trader has been educated and is disciplined to live by his or her trading methodology of good judgment trading. -
21. What Is good judgment trading?
Good judgment trading is the exact opposite of a Black Box System. It's a complete understanding of the market and its constantly changing environment. It is a clear trading methodology utilizing high probabilities. When a trader is educated, he no longer takes a shot gun approach to the market. He takes a very focused "rifle and target" approach.
22. How much money can I make?
If you get involved with the right company offering the proper education and mentoring, you can expect to create a financial performance expectation plan. Your plan will depend on how much you start out with, how knowledgeable and how unemotional you are.
Never enter the market without first paper trading, which is trading pretend money. Once you achieve a track record of consistently completing successful trades and prove to yourself you can trade, then and only then, should you enter the market with your own money. -
23. What do emotions have to do with It?
Where money is involved so are emotions. Many people are quite knowledgeable about trading but can't handle the emotions. Your emotions will be your biggest obstacle to successful trading. Not the techniques. To be a successful trader you cannot trade emotionally. You must trade logically. Our egos drive us to be successful 100% of the time, but in reality no one is successful 100% of the time. Not even the professionals. Successful professional traders clearly understand the market is about logic, not emotions. They trade logically, not emotionally and they are the 10% who trade successfully all the time! -
24. Are there books I can buy to educate myself ?
Hundreds of books are available and we encourage you to read. However, no one has written a "how to - step by step" book on how to become a millionaire over night or even in a month. Why? Because successful trading is a process, it does not happen over night.
The market is vast and complex. Hundreds of authors have written books about most of the characteristics of the markets. There is a lot to know.
Success in trading comes by focusing on one or two markets and specializing in those markets. One must decide what they want to trade, educate themselves and then focus in on that area of the market. We will recommend reading material relevant to your development. One book that all budding traders should read is "Trading in the Zone" by Mark Douglas
25. What can World Forex do for me?
You will begin a personal involvement with a reputable firm and network with successful professional traders. We will teach you all the processes for becoming a successful trader yourself. We will provide you with continuing support and education. We offer advanced trading courses as you progress throughout all stages of your journey.
2. What are the most common currencies in the Forex markets?
3. How is currency traded?
4. What are “short” and “long” positions?
5. What trading strategy should I use?
6. How long should a position be maintained?
7. What is a margin account?
8. How is money made trading currencies?
9. How is pricing determined for certain currencies?
10. What is the difference between Futures and FOREX?
11. Am I buying actual currencies when I trade?
12. What is Day Trading?
13. What percent of people make money on the FOREX?
14. Why do Professional Traders make so much money?
15. Can I become a successful Professional Trader?
16. Is trading a form of gambling?
17. Can I lose everything when trading the FOREX?
18. How can I manage risk?
19. Why don't we hear more about the FOREX?
20. How can I get started?
21. What is good judgment trading?
22. How much money can I earn?
23. What do emotions have to do with it?
24. Are there books I can buy to educate myself?
25. What can World Forex do for me?
1. What is currency trading?
Simply stated, each country has its own currency. Currency trading occurs when one country's currency is traded for another country's currency at the prevailing exchange rate.
2.What are the most common currencies in the Forex markets?
The most “liquid” currencies in the Forex market are those of countries with low inflation, stable governments, and respected central banks. Nearly 85% of daily transactions involve the major currencies, including the U.S. Dollar, Japanese Yen, the European Union Euro, British Pound, Swiss Franc, and the Canadian and Australian Dollars.-
3. How is currency traded?
All currency trading is traded in LOTS. Each lot has a different amount of currency. For example; a Swiss Franc lot has 125,000 Swiss Francs in it. A trader does not buy lots in order to buy and sell it or trade it. A trader opens a margin account, enabling him the right to trade it.
4. What are “short” and “long” positions?
Short positions are taken when a trader sells currency in anticipation of a downturn in price. Making this move allows the investor to benefit from a decline. Long positions are taken when a trader buys a currency at a low price in anticipation of selling it later for more. Making these moves allows the investor to benefit from changing market prices.-
5. What trading strategy should I use?
Both economic fundamentals and technical factors influence the decisions of currency traders. Those who follow economic fundamentals use government issued reports, current news, and broad economic trends to anticipate movements in price. Technical traders rely on trend lines, support and resistance levels, and a variety of charts and mathematical analysis to identify trading opportunities.
6. How long should a position be maintained?
Forex traders generally hold positions until one of three criteria is met:
A sufficient profit has been realized from the position.
A pre-set stop-loss order is triggered.
A better potential position emerges and the trader liquidates funds to take advantage of it.
7. What is a margin account?
A margin account is a bond account. It is like a savings account. Before you can trade, you need to place a certain amount of money in what is called a margin account. You are guaranteeing other traders that you can pay them if you lose. That account is overseen by your broker. He monitors your account when you trade. He usually will not allow you to risk more than what is in your margin account. The margin account exists so, as you win on a daily basis, they have a place to deposit your money. Conversely, when you lose, they have an account to withdraw the money.
8. How is money made trading currencies?
Currencies are traded on a point or pip system. A pip is another word for a point in the currency trading arena. Traders are trying to capture points. Depending on the currency, each point is worth a different amount. For example; the British Pound is worth about $1 per point that is traded per lot. If you trade 1 lot and capture 40 points, you just made $40. If you trade 10 lots and capture 40 points, you just made $4,00.00, etc. (amounts based on a mini account - for a regular account, multiply the dollar amounts by 10)
9. How is pricing determined for certain currencies?
The full range of economic and political conditions impact currency pricing. It is generally held that interest rates, inflation rates and political stability are top among important factors. At times, governments participate in the forex market in order to influence the traded value of their currencies. These and other market factors such as very large orders can cause extreme relative volatility in currency prices. The sheer size of the forex market prevents any single factor from dominating the market for any length of time.
10. What is the difference between Futures and FOREX?
Currencies are the money that represent the monetary system from different countries. For example; the Japanese Yen, Canadian Dollar, Brazilian Real, Swiss Franc, etc. Futures trading of currencies is done in trading pits, where you are trading those currencies today, but for future prices. FOREX trading is trading actual currencies at today's exchange rate with banks. All trades are done through brokers or market makers.
11. Am I buying actual currencies when I trade?
No. With your margin account, you are buying the right to trade one "lot" of a currency. Each lot equals a different amount of currency, depending on the currency being traded verses the US Dollar.
12. What is Day Trading?
Day Trading is when a trader buys and sells his lots or stocks that same day. He is in and out of the market that same day. He does not hold his position overnight or for a week, etc.
13. What percent of people really earn money on the FOREX?
10 % make money, and 90% lose money!
Why?
The 90% who enter the market are driven by emotions such as greed and fear. They lack a sound equity management plan and know very little about the techniques of trading. The fact is they are lacking adequate and proper education for the task at hand.
14. Why do Professional Traders earn so much money?
Most Professional Traders are part of the 10% earning money. The 10% earning money actually receive the 90% money that is lost . If the 90% are paying the 10%, you can easily figure out that the 10% are being paid quite handsomely.
15. Can I become a successful Professional Trader?
Absolutely! Trading is a profession that most anyone can learn. However, it doesn't happen over night or in a few weeks. You must go through the same processes of education and mentoring that all professionals go through. Generally, we are becoming conditioned by numerous national ads into believing that trading is simple. If it is that easy why do we hear the horror stories about day traders? Why do 90% of people lose on the FOREX?
16. Is trading a form of gambling?
All forms of trading and investment can be construed as a form of gambling, although neither are the same as playing the lottery, roulette or betting. Traders seek price fluctuations and investors seek return on investment. Both require a calculated risk that is minimized by knowledge. You are always gambling when you are uneducated, trading emotionally or with a " hot tip".
Calculated risks are taken in all investments. People risk huge sums of money and not every one succeeds. Even when there is a track record of success as in many franchises there is still no guarantee. Their investment becomes a calculated risk.
The FOREX market is no different. When you trade not knowing what you are doing, or off a tip, you are gambling. When you trade after you have been educated or mentored by a successful program, or by other successful traders, you are now taking a calculated risk.
17. Can I lose everything when trading the FOREX?
No. You can't lose everything you own. The under-educated will more than likely lose their margin account. The educated will more than likely capture the loser's margin account money.
18. How can I manage risk?
The most common risk management tools in Forex trading are the stop-loss order and the limit order. The stop-loss order directs that a position be automatically liquidated at a certain price in order to guard against dramatic changes against the position. A limit order sets the maximum price that the investor is willing to pay in a transaction, as well as a minimum price to be received in exchange. The foreign exchange marketplace is so liquid that it is easy to execute stop-loss and limit orders.
19. Why don't we hear more about the FOREX?
Reliable sources indicate that more than 2.5 trillion dollars of currency is traded daily on the FOREX. The majority of the volume historically is generated by major investors, banks, financial institutions and governments. Thanks to the Internet, more and more people like us are beginning to learn of the opportunities and are getting involved.
20. How can I get started?
You need to be very careful and exercise due diligence. There are growing numbers of firms offering various approaches to FOREX trading. Look before you leap. Do your homework and check references. Many companies prey on the greedy promising phenomenal returns that are the exception, not the rule! Find a company that doesn't promise the moon. If it sounds too good to be true, it usually is. Reputable firms have credentials.
Beware of "Black Box" systems. It is against ASIC regulations for a firm to offer any guarantee of performance of any system. What one can guarantee and offer is that their trading methodology is sound, productive and profitable.
Trading decisions should not be made by computer only. A professional trader is a human being, with emotions, intuition and a brain to interpret what the computer tells him/her. A trader is not a computer. A professional trader has been educated and is disciplined to live by his or her trading methodology of good judgment trading. -
21. What Is good judgment trading?
Good judgment trading is the exact opposite of a Black Box System. It's a complete understanding of the market and its constantly changing environment. It is a clear trading methodology utilizing high probabilities. When a trader is educated, he no longer takes a shot gun approach to the market. He takes a very focused "rifle and target" approach.
22. How much money can I make?
If you get involved with the right company offering the proper education and mentoring, you can expect to create a financial performance expectation plan. Your plan will depend on how much you start out with, how knowledgeable and how unemotional you are.
Never enter the market without first paper trading, which is trading pretend money. Once you achieve a track record of consistently completing successful trades and prove to yourself you can trade, then and only then, should you enter the market with your own money. -
23. What do emotions have to do with It?
Where money is involved so are emotions. Many people are quite knowledgeable about trading but can't handle the emotions. Your emotions will be your biggest obstacle to successful trading. Not the techniques. To be a successful trader you cannot trade emotionally. You must trade logically. Our egos drive us to be successful 100% of the time, but in reality no one is successful 100% of the time. Not even the professionals. Successful professional traders clearly understand the market is about logic, not emotions. They trade logically, not emotionally and they are the 10% who trade successfully all the time! -
24. Are there books I can buy to educate myself ?
Hundreds of books are available and we encourage you to read. However, no one has written a "how to - step by step" book on how to become a millionaire over night or even in a month. Why? Because successful trading is a process, it does not happen over night.
The market is vast and complex. Hundreds of authors have written books about most of the characteristics of the markets. There is a lot to know.
Success in trading comes by focusing on one or two markets and specializing in those markets. One must decide what they want to trade, educate themselves and then focus in on that area of the market. We will recommend reading material relevant to your development. One book that all budding traders should read is "Trading in the Zone" by Mark Douglas
25. What can World Forex do for me?
You will begin a personal involvement with a reputable firm and network with successful professional traders. We will teach you all the processes for becoming a successful trader yourself. We will provide you with continuing support and education. We offer advanced trading courses as you progress throughout all stages of your journey.
Labels:
forex FAQ
Posted by
NeWs : )
In the spot forex market, trades must be settled in two business days. If a trader sells 100,000 Euros on Tuesday, the trader must deliver 100,000 Euros on Thursday, unless the position is rolled over. As a service to our traders, FOREXYARD automatically rolls over all open positions to the next settlement date at 5:00 pm New York time. Rollover involves exchanging the position being held for a position expiring the following settlement date. The positions being exchanged are usually not valued at the same price. The difference in amount varies greatly based on the currency pair, the interest rate differential between the two currencies, and fluctuates day to day with the movement of prices.
For positions open at 5.00 pm EST there is a daily rollover (interest payment) you pay for an open position depending on your established margin level and position in the market. If you do not want to earn or pay interest on your positions, simply make sure they are closed by 5.00 pm EST, the established end of the market day.
For positions open at 5.00 pm EST there is a daily rollover (interest payment) you pay for an open position depending on your established margin level and position in the market. If you do not want to earn or pay interest on your positions, simply make sure they are closed by 5.00 pm EST, the established end of the market day.
Labels:
Forex Rollover
Posted by
NeWs : )
FX accounts are margined: a trader can hold a market position much larger than the value of the trader's account value. The online trading platform which FOREXYARD offers has margin management capabilities, which allow lenient margin requirement of up to 1/2%. However, we do not recommend using leverage of more than 10 times your account value. Using leverage exaggerates both gains and losses. Even when market conditions are relatively calm, using leverage can generate large gains or losses. In the case where a trader surpasses the maximum leverage allowed (which can happen when account equity shrinks as a result of trading losses), the trading system will close all open positions in the account. This prevents client's accounts from falling into a negative balance, even in a highly volatile, fast moving market.
Example of How Margin Works
Since the trader opened 1 lot of 10k EUR/USD, his margin requirement or Used Margin is $50. Usable Margin is the funds available to open new positions or sustain trading losses. If the equity (the value of his account) falls below 20% of his Used Margin due to trading losses, his position will automatically be closed. As a result, the trader can never lose more than he/she deposits.
Labels:
Forex Margin / Leverage
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