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Forex Basics

The following is an introduction to some of the basic terms and concepts used in forex trading.

Foreign Exchange : The simultaneous buying of one currency and selling of another.

Foreign Exchange Market : An informal network of trading relationships between the world’s major banks and other market participants, sometimes referred to as the ‘interbank’ market. The foreign exchange market has no central clearinghouse or exchange, and is considered an over-the-counter (OTC) market.

Spot Market : Market for buying and selling currencies for settlement within two business days Read the rest of this entry »

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Forex Charts

Forex charts assist the investor by providing a visual representation of exchange rate fluctuations. Many variables affect currency exchange rates, such as interest rates, bank policies, geopolitics, and even the time of day may affect exchange rates.

In order to help the investor attempt to predict when or in what direction a rate may change, advisors provide forex charts. Quality forex websites provide subscribers with a daily newsletter that includes a forex chart, forex signals and Read the rest of this entry »

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What is FOREX (Foreign Exchange)?

This topic may be useful for all traders and beginners. It tells in brief about Forex.

Forex (Foreign Exchange, Forex currency exchange) simply means the buying of one currency and selling another at the same time. In other words, the currency of one country is exchanged for those of another. The currencies of the world are on a floating exchange rate, and are always traded in pairs Euro/Dollar, Dollar/Yen, etc. In excess of 85 percent of all daily transactions involve trading of the major currencies.

Four major currency pairs are usually used for investment purposes. They are: Euro against US dollar, US dollar against Read the rest of this entry »

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Forex Market

Forex market - the interbank international exchange market. Banks of the different countries are trading among themselves in currencies of the different countries. But the total volume of these operations is huge, in day he exceeds 3 billion US dollars! It also is Forex market! Forex market reminds the Internet - he belongs to nobody, nobody can operate it.

Exchange-traded Forex futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts. Forex futures volume has grown rapidly in recent years, but only accounts Read the rest of this entry »

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Forex Currencies

The US economy is the largest in the world. That is in the majority of Forex transactions traders involve the US dollar against another currency.

The German mark, the Japanese yen, sterling (British pound) and the Swiss franc have been the basic currency of a lot of trading transactions. Each of these markets has very distinct features.

The German mark has been replaced by the Euro. The German mark was a tower of strength. The traditional role of the Bundesbank was undermined after unification with the former East Germany and it has now been replaced by Read the rest of this entry »

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Forex Psychology

A trading psychology, based upon how well you know yourself and are able to profit from your strong points, as well as control you weak ones, has a lot to do with how successful of a trader you will be. When you truly know yourself, then you are aware of how you are going to react under certain circumstances and you can protect yourself from self-damaging actions or decisions when it comes to managing a trade.

The overlap between trading and psychology is complex. Psychological factors, such as performance anxiety, can interfere with clear-headed decision-making about markets. Similarly, poor trading practices - such as taking on too much risk with excessive size - can magnify the normal stresses of the marketplace. Sometimes it is difficult Read the rest of this entry »

Tags: forex currency, forex history, Forex Market, Forex psychology, Forex Trading

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Forex advantages

There are some Forex market advantages: liquidity, efficiency, cost, quotations unambiguity, the margin size.

1) High liquidity. (i.e. an opportunity of reception under the transaction of money, instead of the goods). The market on which money are assets, have highest of all possible liquidities. This circumstance is powerful attractive force for any investor since it provides to him freedom to open and close a position of any volume. The FOREX market with an average trading volume of over $1.5 trillion per day is the most liquid market in the world. That means that a trader can enter or exit the market at will in almost any market condition minimal execution barriers or risk and no daily trading limit.

2) Efficiency (a 24-hour market). The main advantage of the Forex market over the stock market and Read the rest of this entry »

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Forex Participants

According to the BIS study Triennial Central Bank Survey 2004

53% of the transactions were interbank or interdealer strictly

33% of the transactions dealt with a fund manager or an kind of financial institution not associated with banks and a dealer (like bank for instance).

14% were held between non financial organizations and dealers.

Commercial banks take the majority of currency deals. Accumulating the markets exchange conversion cumulative needs due to clients’ operations as well as means accommodation or attraction and their movement to other banks are the main bank activities. Banks can carry out their independent deals for their own purpose aside from customers. Large international banks such as Deutsche Bank, Barclays Bank, Union Bank of Switzerland, Citibank, Chase Read the rest of this entry »

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