Forex

Foreign Exchange Markets

Tue, 14 Aug 2007 14:20:01 +0300

Foreign Exchange Markets

Participants of a foreign exchange market

The main participants of a foreign exchange market are:

Commercial banks
Exchange markets
Central banks
Firms that conduct foreign trade transactions
Investment funds
Broker companies
Private persons

Commercial banks conduct the main volume of exchange transactions. Other participants of the market have their accounts at the banks, conducting necessary conversion transactions. Banks accumulate (through transactions with the clients) the combined needs of the market in exchange conversions as well as in calling and distributing money, breaking with it into new banks. Besides satisfying clients' requests, banks can operate independently, using their own assets. In the end, a foreign exchange market is a market of interbank dealings, and when speaking about the exchange rates movement, one should bear in mind the existence of an interbank foreign exchange market. In international foreign exchange markets, international banks with the daily volume of transactions of billions dollars have the biggest influence. These are Barclays Bank, Citibank, Chase Manhatten Bank, Deutsche Bank, Swiss Bank Corporation, Union Bank of Switzerland, etc.

Exchange markets Contrary to stock markets and markets for terminal exchange dealings, exchange markets do not work in a definite building and they do not have definite business hours. Thanks to the development of telecommunications most of the leading financial institutions of the world use services of exchange markets directly and via mediators 24 hours a day. The biggest international exchange markets are the London, New York and Tokyo exchange markets. In some countries with trans.. ( devamı )

Other useful resourses

Tue, 14 Aug 2007 14:20:00 +0300

Other useful resourses

It's only natural that, for professional work as an FX trader, a mere wish alone and technical opportunity are not enough. A person may be very gifted, but first he should learn a craft with all its subtleties and peculiarities. It's also clear that our web-site can neither replace a pile of manuals nor present a huge amount of articles, online textbooks and other material, supplied by the Web.

Of course, we do have some auxiliary materials: advice, FAQ, but still it is not enough if you are a newcomer in the FOREX market. That is why we present here a rather extensive list of references supplied other recourses available for reading and copying by the user of the Internet. If you can offer an interesting reference or an article, we'd be pleased to place it in this section.

ANALYSIS:

Accurate Forex Trading Signals - Forex Trading Signals/Alerts for Swing Traders.
Foreign Currency Exchange - Make your international payments with North America’s leading foreign exchange services provider including funds transfer, forward contracts, and currency risk management.
AceTrader - trade signals on the majors, updated six times/day. Trade signals with stops and profit objectives, plus in de.. ( devamı )

Part I: What is the Forex Market and How is it Different?

Tue, 14 Aug 2007 14:19:00 +0300

Part I: What is the Forex Market and How is it Different?

What is the Forex Market and How is it Different?

The foreign exchange market, often referred to as forex, is the market for the various currencies of the w.. ( devamı )

Advantages of Forex

Tue, 14 Aug 2007 14:18:01 +0300

Advantages of Forex

Trade on Your Schedule

The single biggest advantage the forex market has over other markets is its 24-hour nature. A trader can put on or take off positions literally any time of day or night, regardless of their base of operations. That opens the game up to a great many individuals who might not otherwise have the time available to trade.

Consider, for example, the working person with a 9 to 5 type of job. Most folks like that cannot be expected to operate effectively as day traders in a market such as stocks. They just can't spend the requisite time watching the market during trading hours. With forex, though, one could theoretically day trade in the evenings after work, or in the mornings beforehand. The forex market is never really closed (yes, in some cases you can even trade on the weekend!).

No (or low) Transaction Costs

For most traders, the forex market also offers the benefit of no transaction costs. For the most part, forex brokers do not charge commissions (if they do, they are relatively small). There is, of course, the bid/offer spread, which can be viewed as a transaction cost, but the reality of the situation is that most traders buy at the offer and sell at the bid in whatever other market they trade, so that's really no different. Actually, the forex spreads can be quite small in the major currency pairs.

Low (or no) Account Minimums

Forex trading is also open to a wider trading demographic in that there are many opportunities to open smaller accounts than is.. ( devamı )

Terminology and Market Conventions

Tue, 14 Aug 2007 14:18:00 +0300

Terminology and Market Conventions

If you are going to trade forex you need to understand the terms and quoting conventions used, especially in regards to the spot market.

Notational Conventions

The forex market uses 3-letter codes for all currencies. These are commonly known as SWIFT or ISO codes. For example, USD is the code for the US Dollar. Here are the codes for the other primary currencies:

AUD: Australian Dollar
CAD: Canadian Dollar
CHF: Swiss Franc
EUR: European Euro
GBP: British Pound
JPY: Japanese Yen

( For a complete listing of all currency SWIFT codes, click here. )

Expressing a relational value between two currencies is done by combining two currency abbreviations in the fashion of XXX/YYY. This indicates the amount of YYY currency (the "quote" currency) equivalent to one unit of XXX ("base" currency). For example if the exchange rate for USD/JPY - the US Dollar to Japanese Yen rate - was 100 it would mean that each USD is worth 100 JPY.

Using this convention, changes up or down in the quoted exchange rate indicate changes up or down in the value of the base currency. Using the USD/JPY example again, if the rate went from 100 to 101 it would mean a 1% increase in the value of the USD against the JPY. Similarly, a decline from 100 to 99 would represent a 1% fall in the USD value vs. the JPY.

In theory, one could quote the exchange rates either way aroun.. ( devamı )