Friday, December 18, 2009

Forex Markets



The Forex market
is known to be a very lucrative market, with trillions of dollars exchanged daily. The forex market is known as an international exchange currency market, where currencies are exchanged on a daily basis. Or are you a trader who is looking for other markets to play around with? Well hopefully, we will give you an introduction to the Forex markets that will accommodate both your needs and inform you of the basic concepts and issues that intertwine with the world's currency exchange market.

While these Forex traders know their market, it's simply not possible to understand and stay in touch with everything that occurs in all the types of investment vehicles and markets across the world. Did you know that the forex (foreign exchange) market is 30 times larger then all other US markets combined. As you start analyzing forex charts you will realize that the market often displays some very familiar patterns of price movement, that are known as trends; and you will notice that once a pattern is established, it becomes the most probable course of future price action until the market changes.

As always in Forex, your main trading objective is to get into profitable trades most of the time and a trending market is the perfect situation to find this profitable trades by riding the trends until you make your target profit objective of the day. As you fill find mentioned in any article about forex, the key difference between technical analysis in the equities market, and technical analysis in the Forex currency trading market, is the fact that it is possible to participate in Forex trading 24 hours a day, seven days a week. However it should be accepted that forex currency trading could also be a very risky investment as the market can swing both in an upward and downward movement in a split second depending on the market conditions.

All that can be said is that it does offer an alternative method of currency trading but should still be ventured into with predetermined loss limits and careful study of the currency market. You're probably thinking that demo accounts are worthless since they don't mimic live trading very accurately, but in the case of currency trading the forex, you would be wrong. There are a number of workshops available that are ideal if you're new to the Forex market and have some experience trading stocks or other products.

There are a bunch of benefits that make the Forex market a far superior investing and/or trading vehicle than any other financial instrument in the world. For the Forex trader it is simply a question of deciding in which direction the market is likely to move and then deciding upon a payoff should the market move as he expects within a given time frame. There is another situation in which stop hunters try to move the market toward a group of stops in the hope that triggering the stops will push the market further in the same direction, thus triggering even more stops and so forth in a snowball effect.

How Does the Forex Market Work?

Since investing in Forex markets has become quite a lucrative option, it’s likely that you are planning to take the plunge. However, before you do so, it’s recommended that you do your homework, i.e. understand exactly how the Forex market works. This is necessary because although profitable, Forex markets are quite complex and are governed by varied factors that almost always are in the mode of constant change. It basically implies that if you will never get far until and unless you uncover the inherent complexities of the Forex markets and this can be easily accomplished when using forexfunnel.

The first thing you need to know is that Forex markets basically work like global currency exchange markets wherein all the stakeholders such as traders, and investors buy and sell world currencies with an aim to book profits in due course. Forex markets are quite unique in that they are the only places where the purchased items and the sold items are basically the same, i.e. currency or simply ‘money’. The basic operations with forexfunnel involve the trade of any two currencies at a given point of time, for example, USD/CHF, CAD/USD, Euro/JPY etc. Depending on how investors might perceive the earning potential available in the existing market, they can pick any two currencies of their choice and start trading.

You may not be aware, but the truth is that the Forex markets are the world’s largest trading zones where trade volumes on an average hover around 2 trillion dollars per day. In the United States alone, the total Forex trade turnover is almost 30 times of the total equity trade volumes, something that goes on to show the immense opportunities that exist in the Forex markets. In effect, if you can somehow manage to get even a small portion of this huge pie, it will not be long before you start living the life of the rich and the famous. Forexfunnel provides this opportunity.

However, do not book that dream house just as yet simply because although opportunities exist, you can never guarantee that you will start booking profits, especially when you are at it the very first time. You see, the main problem is that just like any other lucrative market, the Forex markets have also been the playground of highly competitive forces such as banks, MNC’s, and of course the high net worth individuals. So, if you enter this market, it’s quite certain that you will have to compete with the biggies, including all big banking ventures, and a few others who together account for about seventy percent or more of the overall Forex market trade volumes. It certainly won’t be easy obviously because most of these competitors have better talent and more resources at their disposal but forexfunnel can help you reach out.

Do not lose hope because what is also true is the fact that many novices who started small, went on to make millions in the Forex markets. They would never have made it had they been afraid of the competition. So, I would recommend that you show some courage and most importantly follow your instincts with Forex Funnel. I can bet you too will soon make it to the coveted list.

How to Survive the Forex Market With a Forex Robot

The Forex market lures the money hungry masses with its promise of huge gains and profits to be gleaned by all who will avail themselves of her. The unsuspecting novice will attempt to jump into the Currency Market thinking that he or she can just begin the trading process and the profits will begin to flow.

The sad fact is there's no free lunch. If you're not careful, the Forex Market will take you by the heels and not only empty your pockets of your hard earned cash, but it will take you spare change to!

Did you know that 95% of those people who trade on the Forex Market actually lose money in the long run? 95% lose money trading Forex? That is not a pretty number!

Now don't let me scare all you potential Forex traders off. Although the Currency market is tough; there are ways of creating long term profit, even a very decent living if it is done right.

So how does the beginner Forex trader not lose his or her shirt and actually make a profit?

Enter the newest and most sophisticated Currency Market traders on the planet, the Forex Robots.

A Forex Robot is a complex little piece of software that is designed specifically to accurately read the trends of the Forex Market and make trades automatically for you.

A good Forex Robot can make a trader profitable over the long run. You're not going to get rich over night using one of these Robots, and even a "smart" Robot will lose occasionally in the short run.

The thing to remember if you're in the market for an automated trading system is that not all Forex Robots are created equal.

Many of these so called "profitable" Robots have not been extensively back-tested, and never live traded. Always find out how the Robot you are interested in has been put through the paces before you think of investing in one.

When you do find a professionally designed Forex Robot that has been strenuously tested for profitability and backed by a knowledgeable staff that is available 24/7 for any technical questions you might have, you will then begin to see your way to long term profits in the Forex Market.

Things You Need to Avoid While Trading in Forex Market

With so many options in trading and investment, it can be difficult to know which one is right for you. Forex trading is a great option for some, but before getting started you should be aware of the specifics of the Forex market
. The biggest thing you need to avoid is getting involved in the Forex market if it isn't right for you.

Forex trading is a great option for those who are looking for a flexible schedule to do their trading. If you want an investment opportunity that has set hours when it will be active and downtime when it's not, Forex trading is likely something you should avoid. Unlike other markets and forms of investing, the Forex market is open 24 hours during the week. This means that if you want to do you trading over breakfast while you have your first cup of coffee, it is entirely possible. Conversely, if you are more of a night owl and want to do your trading in the evenings just before retiring for the night, Forex trading can work into that schedule. You will never have to watch your clock to be sure you get your trades in before a certain time.

If you're looking to trade in an arena where only people with deep pockets will be involved, you'll want to avoid Forex trading. A unique aspect of Forex trading is the fact that you can start with a very low initial investment. In fact, you can start with as little as $250. This makes Forex trading great for those who have very little capital to begin with. It's also a great option for those who wish to start slowly. You can start with a small initial investment to get your feet wet and increase your investment as your profits rise and you begin to feel more comfortable in the market.

Forex trading also involves one click trading and typically does not come associated with any fees. Being able to trade with one click means you can start trading as soon as you see an opportunity, you can take advantage of it. In many cases it is instantaneous, which will prevent you from putting an order in, only to find the value has changed dramatically by the time your order is actually filled. Most brokers make money off the spreads rather than fees associated with each trade. This will allow you to make much smaller trades. With other forms of trading, a fee associated with each trade might be so high that you would feel you had to buy much more than you'd like, simply to make up for the cost of the fee. With Forex trading this is not the case and leaves you with much more versatility in your trading.

No matter how you choose to invest, whether through the Forex market or other ways, it's important to do your research and watch your potential market for a few days before getting involved. However, it's also important to understand that there is no substitute for jumping in and getting your feet wet. Choosing Forex trading is a great way to do this, as you can keep your initial investments low as you learn the ins and outs of the Forex market.

Introduction to Trading the Forex Market

This article aims to uncover the many myths that exist about trading the forex market and all the promises and lies that exist. The first step is to open a trading account with your broker. But once you have developed this kind of ability, then you can move forward in trying out the other areas of trading in the Forex market, which is the largest trade market in the world.

If you are a beginner to the world of Forex trading, you need to quickly develop the skill of understanding foreign exchange market information. Here we will show you how to get an edge with Forex Trading system that is unique and has made huge profits. Look into finding a good solid news trading system.

Forex trading starts from New Zealand and then is followed by Australia, Asia, the Middle East, Europe and America. And if you want to know when the forex trading is the heaviest, well look for the time when the major markets overlap. A trading podium of the broker will be an added advantage.

Forex trading is the largest and the most liquid market of the world. As a result, if you want to be a real forex market investor, then you must know some points about trading in forex. Because of not having a cash amount as national banks, there had to be new definitions about trading and account types.

Currency options are also widely used outside of the Forex markets and are particularly favored by companies trading in goods overseas. Within the Forex market it is common for traders to use currency options in order to minimize their trading risk.

Experienced Forex Traders know that when the prices start touching the upper Bollinger Band in a repetitive pattern, that means that prices are very likely to go down, so they sell. Why is it that traders around the world see the Forex market as an investment opportunity. This leverage is known as "margin" and some brokers will allow traders even higher leverage than 100:1.

These traders constantly negotiate prices with other traders resulting in the fluctuation or movement of a currency's value. A trading product that has been overlooked by many traders is forex. It is now actually possible for the retail investor or "home office based trader" to trade real time with the banks through the environment of a broker using computerised trading platforms which may have live desk traders placing trades either in the brokers books (95% of traders lose money so it's in their interests not to trade for real), or for real - for the winners.

Among the most rewarding markets opening up to traders is the forex market. Day traders attempt to take advantage of the daily fluctuations in the market by making multiple trades during the day. To trade successfully you need an edge over other traders. If you can't think what yours is, you haven't got one.

One essential difference with the commodities/futures market however lies in the fact that for many futures traders there is no intention to actually purchase the goods in question or to take delivery and it is the futures contract itself that is the trading instrument.

The World Wide Forex Market

Forex is a trading 'method' also known as FX or and foreign market exchange. Those involved in the foreign exchange markets
are some of the largest companies and banks from around the world, trading in currencies from various countries to create a balance as some are going to gain money and others are going to lose money. The basics of forex are similar to that of the stock market found in any country, but on a much larger, grand scale, that involves people, currencies and trades from around the world, in just about any country.

Different currency rates happen and change every day. What the value of the dollar may be one day could be higher or lower the next. The trading on the forex market is one that you have to watch closely or if you are investing huge amounts of money, you could lose large amounts of money. The main trading areas for forex, happens in Tokyo, in London and in New York, but there are also many other locations around the world where forex trading does take place.

The most heavily traded currencies are those that include (in no particular order) the Australian dollar, the Swiss franc, the British pound sterling, the Japanese yen, the Eurozone eruo, and the United States dollar. You can trade any one currency against another and you can trade from that currency to another currency to build up additional money and interest daily.

The areas where forex trading is taking place will open and close, and the next will open and close. This is seen also in the stock exchanges from around the world, as different time zones are processing order and trading during different time frames. The results of any forex trading in one country could have results and differences in what happens in additional forex markets as the countries take turns opening and closing with the time zones. Exchange rates are going to vary from forex trade to forex trade, and if you are a broker, or if you are learning about the forex markets you want to know what the rates are on a given day before making any trades.

The stock market Is generally based on products, prices, and other factors within businesses that will change the price of stocks. If someone knows what is going to happened before the general public, it is often known as inside trading, using business secrets to buy stocks and make money - which by the way is illegal. There is very little, if any at all inside information in the forex trading markets. The monetary trades, buys and sells are all a part of the forex market but very little is based on business secrets, but more on the value of the economy, the currency and such of a country at that time.

Every currency that is traded on the forex market does have a three letter code associated with that currency so there is no misunderstanding about which currency or which country one is investing with at the time. The eruo is the EUR and the US dollar is known as the USD. The British pound is the GBP and the Japanese yen is known as the JPY. If you are interested in contacting a broker and becoming involved in the forex markets you can find many online where you can review the company information and transactions before processing and becoming involved in the forex markets.

Practicing in the Forex Market

So you want to learn about the Forex market, and trading internationally but you are risking your personal wealth if you jump in before knowing all about how trading takes place. Online, you will find many games and simulations while learning the methods involved in forex market trading. The forex markets include countries from around the world, where all countries involved are using different currencies, and when faced against each other are worth more or less than the original valued currencies that are being traded. The forex markets are used to build wealth in, for governments, banks, and brokers, and for many countries.

To get started in learning about forex trading, you will need to locate the forex trading software, education-learning system you want to use. As you find the games, as they are called, you will enter information about yourself, about what you are interested in learning and then you will download software to your computer. In following the 'game', you will learn how to make and lose money in the forex market. This type of game is going to make you more aware of what happens daily, how the markets open and close, and how different the various countries currencies really are.

You will open an online 'account' using the gaming system. You will then be able to read the news, find and compare markets, and you will be able to make 'fake' trades so you can watch your money build or be eaten away in losses. As you learn the system, using it a few times a week, you are going to be more prepared, more educated and you will be ready to use the forex trades to make money. Of course, you may still need the aid of broker or a company to make your transactions happen but you will better understand the process, what will happen, and what calls you may want to make when you read about the news, the markets, and the currencies in other countries.

The forex market is also referred to as the FX market. If you are interested in joining the millions who are making money in the forex markets, you want to ensure you are dealing with a reputable banker or company involved in forex trading. With the spur of interest in the forex markets, there are many types of companies that are popping out on the Internet appearing to be genuine forex trading companies but in reality, they are not. Forex trading can be completed through a broker, a company that deals in the funds, and from within your own country. For example, the US has many regulations and laws regarding forex trading and what companies are permitted to work with the public dealing with international trading and markets.

Advantages of the Forex Market

When considering investing for the first time, you may have run into several different types of ways of gaining profits, each with their own advantages and disadvantages. While Forex may be the lesser known type of investing, it is seemingly the one with the most advantages.

The Forex does not actually have a physical address. Instead, the Forex market is a network of central banks and investors all over the world that handles currency.

Traditional trading markets around the world follow what you would call typical bankers hours. Trading only happens during the day, and very rarely on the weekend. This makes trading in traditional markets a pretty easy process, as long as you are not a night owl.

The Forex market, on the other hand, literally stays open 24 hours a day. Since Forex trading involves the exchange of foreign currencies, the market must follow the countries using the currency. Primarily, the market follows the United States of America, Asia, and Europe. The Forex market does now actually have a physical address. Instead the Forex market is a network of individual investors and central banks all involved in this process.

While being able to trade 24 hours a day has it advantages, it can also present a problem. Even the most successful investors are not able to stay awake 24 hours a day to monitor the market. The Forex is a fluid market, which changes rapidly and often. Sometimes, these changes happen while the investor is asleep or going about their daily routines. If these changes are not constantly monitored, some profits may be lost.

One alternative to this is hiring a professional investor or broker to help you. This takes some pressure off of you, but presents its own problems. Not only are you paying more money out, but the broker is human as well, and cannot check the market constantly.

Due to the rising popularity of the market, brokers and online programs have made simulated programs, which allow you to trade in real time, without the use of actual money. This, along with various other forms of education, allows you to prepare to trade without actually losing any money in the process.

Perhaps the best alterative is using an online trading program. With the FreedomRocks online trading system, you are not required to stay up all hours of the night, studying market flows, charts, and the ever-changing statistics in order to maintain a successful portfolio. By setting your predetermined settings, the FreedomRocks Forex trading system will make an informed decision, allowing you to sit back and watch your profits increase.

The Forex market is an extremely liquid market, allowing you to control your profits. You have the ability to invest as little or as large amount of money as you would like.

Most other types of investments require you to place large amounts of money up for extended amounts of time. Forex trading works on a margin system, which means you only have to put a portion of the contract up. This money is more of an insurance policy just in case the contract goes negative.

Finally, one of the best advantages to the Forex market is the fact that you do not have to rely on the market to be up in order to make money. Profits can be made in both upward trends and downward trends.

Forex Market Structure

At the very top of the forex market are transactions which are collectively called Interbank transactions. The “Interbank” is not, as some people may believe, an exchange. Rather, it is a collection or compilation of agreements between and among the major money center banks in the world.

An example may make it easier to understand this thing we’re calling the “Interbank” market. In most larger offices or business, perhaps even in your own home, there may be several computers which are inter-connected by means of a simple network cable. Now, each computer operates independently until the moment it needs a resource, program or file from one of the other computers. When that happens, computer A will contact computer B (or C or D, etc.) and request permission to access the needed resource. If the owner or operator of Computer B authorizes it, and if Computer B is functioning the way it should be, then the needed file or program can be accessed. Within minutes, Computer A’s request is fulfilled. It works the same way in the forex market; just substitute Computer A and Computer B for Bank A and Bank B and let resources substitute for currency. You now have the machinations for the relationships that exist within the Interbank system.

By the same context, if you’ve ever tried to locate resources from a computer that isn’t united by a computer network, you probably know full well what a time consuming, inefficient, sometimes futile effort it can be. You have to search each and every independent computer until you’ve found your resource, copy it and then download it to your own computer. Regarding prices and forex currency
inventory, the same issue exists within the Interbank market system. If a bank in Taiwan occasionally transacts business with a firm in Sao Paula they need to exchange their currency. In this case, it can be quite difficult to determine what the proper exchange rate between the New Taiwan Dollar and the Brazilian Real should be. Because of situations such as this, the Electronic Broking Service (EBS) and Reuters established their services. For simplicity, we’ll refer to this service as ESB.

In a way, the EBS service acts as a blanket over the Interbank communication links. Through the EBS service, Interbank members are able to see how much currency is available, and the price(s) the other Interbank participants are willing to pay. It’s important to understand that the EBS is not in itself a market nor is it a market maker. The EBS system is merely an application allowing bank members to see offers and bids from the other members.

The forex market’s second tier essentially exists within each individual bank. If you were to call your local Citibank branch, they can arrange for you to exchange your U.S. Dollar for the foreign currency of your choosing. In all probability, they will likely just move the desired currency from one bank branch to another one. This is known as a single party micro-exchange, so you are pretty much at their mercy as it applies to the foreign exchange rate you’re quoted. You can either accept their “kind” offer or shop around for a better rate. Anyone who trades in the forex market should consider paying their bank a visit, at least once, to have an idea of their quotes. Certainly, it will be very “enlightening,” if not downright shocking, to see just how profitable these transactions are… for your bank.

The third tier is the retail market. Established foreign exchange brokers such as Forex.com, Oanda and FXCM, etc. or any broker who wishes to set up a retail operation, needs first to find a liquidity provider. The large majority of these forex brokers sign an agreement with a single bank. This bank agrees to provide liquidity only under certain conditions: That is only if they can simultaneously hedge it on EBS, including their desired spread.

These spreads will be highly competitive, and that is because that volume will be much greater than any single bank patron would ever transact. Bear in mind, banks are in the business to make money, and third tier providers will almost never precisely match what actually exists on the Interbank system. Banks collect the spreads and no agreement between them and a forex retailer is going to alter their priority.

Think of retail forex as a kind of casino. Most of the participants have little or no knowledge of forex trading effectively or successfully and, as expected, they’re consistent losers. The forex broker has the house advantage because of the inherent spread system and the normal probability distribution of returns. What results, is a system that plays one loser against one winner and collects the spread. If there is a dis-equilibrium within their internal order book, a broker may hedge the exposure with their second tier liquidity provider.

Though it may not sound good, there are significant advantages to the speculators that work with them. Since it is “internal,” many features, such as high leverage on an account with only a small balance, a non-standard contract size, and commission-free transactions can be provided which may not be available through any other means.

An ECN or Electronic Communications Network operates similarly to a second tier bank, but it exists, rather, on the third tier. The ECN generally will establish a liquidity agreement with more than one second tier bank. Instead of internally matching the book orders, it just passes the quotes through from the banks, as they are, to be traded. You might look at it as an EBS, of sorts, intended for the little guys. While there may be several advantages to the model, it still isn’t the Interbank.

Factors Influencing The Forex Market

Trading the forex market is definitely not a game for a newbie, so if you are one of them then you need to brush up on your skills before getting your hands wet. The forex market is open 24 hours a day. It provides a great opportunity for traders to trade any time of the day or at night. The market is always ready for the traders to trade and make money.

As one of the most liquidly traded instruments in the financial world, the EUR/USD currency pair serves as an ideal barometer of broader financial market conditions and risk appetite. Forex market makers must fulfill their obligations irrespective of whether the economic situation is favorable or unfavorable, or whether they lose or profit by doing so. Forex market conditions continue primed for breakouts, as pronounced market indecision surrounding the US Treasury's bailout for credit markets leads to similar uncertainty in US dollar currency pairs. Such elevated levels of currency volatility leave breakout trading signals in pole position to accurately forecast currency movements through near-term trading.

Traders put a lot of time and effort in developing setup rules, and too often neglect other aspects such as position sizing or relative size of your profits as compared to losses. Therefore it's important to find a comprehensive forex trading system. Traders around the world enter trades for weeks, days or split seconds, generating explosive moves or steady flows, and money changes hands quickly at a staggering daily average of a trillion US dollars. Forex profitability is legendary. Trades are made on margin, with a minimum requirement of 1%. This allows for much more leverage than other markets, as well as security against losses.

Companies that sell and buy foreign currencies as part of their business like independent brokers and currency dealers, only make up a small percentage of forex trading. The majority of forex trading comes from banks, investment companies and brokerages. Companies engaged in foreign trade transactions worldwide are active participants in the international forex market . For exporters, there is a constant need to sell foreign currency, while importers are constantly needing to buy it.

Exchange rates in forex are determined by interest rates, economic growth, inflation, trade deficits or surpluses and other macroeconomic factors, which can be easily evaluated or judged. But in the case of stock and commodity markets, the prices are influenced even by small factors other than the above, which makes it difficult to predict or judge the prices.

Forex Market In the Hand Of Technology

The foreign exchange market is a place where everyone can trade almost all currencies from all over the globe. The vast majority of daily transactions are completed on bigger scale between the banks around the world. Only a quarter of all trades are done by individual retail traders.

Individual forex trading
including futures and options are traded on a few foreign exchange centers in New York, London and Tokyo. The forex market is the largest financial market in the world and has daily transaction turnover of USD 1.5 billion. That would equal around twenty days worth of trading on New York stock exchange market.

Forex has no specific location.Thanks to modern technology, traders are able to complete transactions over the phone or internet or other electronic ways. This is why trading got a name OTC (over the counter).Forex exchange market stays opened 24 hours a day from Monday to Friday and trades continuously between Europe, America and Asia. While one market closes another opens keeping the money floating with no problem or hold up.

The main worlds currencies including American dollar, Japanese yen, British pound, Swiss franc, Canadian, New Zealand and Australian dollar cover almost 85 percent of the whole markets turnover. All of transactions are completed by Commercial banks, Central banks and exchange brokers. More than half of them are done between Commercial Banks and they are the largest investors in foreign exchange. The rest is spread out between individual brokers and central banks. Brokers allow access to forex investment for smaller local banks and also individual investors. Central banks use currency trading to stimulate the level of national currency flow and economic conditions.

Very dynamic development of foreign exchange market combined with technology boom of the last decade, the forex exchange market has become an excellent source of income for many individuals interested in investing their capital and seeking fast and substantial returns. Thanks to wide brokerage offers and easy access to internet people these days can trade forex with no hassle and stay up to date with most recent information and forex events.

There are many forex related websites available over internet where traders can obtain any information, updates, support and advice on how to trade currencies. The forex market is considered quite stable, safe and easy to understand to compare with stock exchange market for example. Trading currencies was never easier than it is now with all the tools available from your local brokers.
With specific strategies like stop loss and limit orders, people have no need to spend all day in front of their PC and watch currencies moving. Now we can place our orders and enjoy making money from global financial markets.

All we need is a little knowledge about the subject and internet connection to be part of world's biggest financial market. However before you start to trade, make sure that you are equipped with all possible tools well thought approach to trading as it will take effort to succeed. Remember that it is as good place to lose money as it is to make it.

Political Conditions Affect the Forex Market

Forex trading is something that many people to not understand. While they hear of the dollar "fluctuation", they never quite understand the process or what it means. Forex trading allows banks and other agencies and entities to trade actual currency from around the world on a 24 hour basis (minus weekends). The market moves over $3 trillion a day, so it is easy to see why the process can be confusing and overwhelming at best. While there are multiple factors that affect the direction of the movement of money on the forex market, the political conditions in a country can help people understand some of the movement on the forex market. Understanding these factors and seeing how they play out can help you understand how and why people play the "forex" game to try to achieve returns on their investments.

War

War can severely affect how a currency is traded on the forex market. The forex market looks at world events as starts for long-term trends that will affect the positive and negative trends of the currencies of various countries. If a country has engaged in war, it could go positively or negatively, depending on the situation and the countries involved. Countries that are seen in a good light because of the war may see their currency traded positively. Those who are at a disadvantage, or are seen in a negative light, will see their currency traded negatively, in a downward trend. Either way, war can seriously change the way currencies are traded.

Peace

With that being said about war, those who trade on the forex market also take note of peace and peaceful countries. The countries that stay peaceful in times of war are often seen as stronger countries. They are seen as stable because they are staying out of the war and out of any conflict. Forex traders look for stable countries when the currency they have is in an unstable one to be sure that they do not lose out on their investments.

Allies

The allies that a country can have can seriously affect how their currency is traded. When people have investments in a particular currency on the forex market, they may look to the allies of a country for other investments; allies are seen to be strong together, and can be seen as a good fit for those looking to dabble into other currencies.

Enemies

The enemies that a country can have can also affect how the forex market deals with them. Countries that have powerful enemies may see their currency dip, as investors are not willing to take a risk on an unstable country that could be considered weak. Investors tend to look to the relationships between countries and currencies to try and play the forex market to get the best return on their investment. If a country has powerful enemies, they may not be seen as a safe investment.

How to Trade in the Forex Market

At some point in time, every person remotely interested in making money by investing has heard of currency exchange markets or the Forex market. Lots of newcomers to the industry have wondered about the mechanics involved in currency trading or more specifically, just how the Forex market functions. If you have any aspirations of being successful in the Forex market or trading in currencies, then it's a given that you need to know what Forex is and how to execute trades in that market.

One of the keys to being successful at it is to try and learn as much as you can from the experts. This is where you can benefit from the Forex tutorials that are offered online, as well as listening to the experts that developed them. Not only will you learn how the Forex market operates, but you'll gain the knowledge that you need in order to execute a Forex trade successfully and profitably. You'll also learn about market indicators and what they mean, economic indicators that you have to be aware of, and all the options and strategies that will benefit you as a trader in the Forex market.

This is especially true if you're a complete newcomer to the game. It's essential to learn your way around the industry before you ever open up your wallet and part with any of your hard-earned cash. Most of the better online Forex trading websites offer you a variety of tutorials so that you can get up to speed fairly quickly. The nice thing about these is that it isn't like being in school where you study then take an exam, study then take another exam, study ... you know. With the online tutorials you always work at your own pace and never jump into the trading market until you are completely ready.

The most important thing for you to accomplish is to not only educate yourself well enough to start trading, but to educate yourself enough to start trading successfully. The more you learn, the more you will understand the market and how it operates. The more you understand about the market and its system of operating, the sooner you will make a successful trade --- and hopefully it's only the first of many.

Finding a Forex trading tutorial is not difficult. A simple Google search or using info.com will result in tons of options for this. There are some that will try to convince you that the ones you pay for are better than the free ones. DON'T BELIEVE IT! The free ones are just as good, you just need to set up a trading account for some of the better ones, but that was your goal anyway. You just needed to educate yourself a little first.

The secret to any kind of successful endeavor in the Forex market is getting an education in it first. It's the same old story that you have heard all along --- knowledge is power --- and this case, the more knowledge you possess, the more successful you will be in your trading endeavors.

Participating in Forex Market Trades

The forex market is all about trading between countries, the currencies of those countries and the timing of investing in certain currencies. The FX market is trading between counties, usually completed with a broker or a financial company. Many people are involved in forex trading, which is similar to stock market trading, but FX trading is completed on a much larger overall scale. Much of the trading does take place between banks, governments, brokers and a small amount of trades will take place in retail settings where the average person involved in trading is known as a spectator. Financial market and financial conditions are making the forex market trading go up and down daily. Millions are traded on a daily basis between many of the largest countries and this is going to include some amount of trading in smaller countries as well.

From the studies over the years, most trades in the forex market are done between banks and this is called interbank. Banks make up about 50 percent of the trading in the forex market. So, if banks are widely using this method to make money for stockholders and for their own bettering of business, you know the money must be there for the smaller investor, the fund mangers to use to increase the amount of interest paid to accounts. Banks trade money daily to increase the amount of money they hold. Overnight a bank will invest millions in forex markets, and then the next day make that money available to the public in their savings, checking accounts and etc.

Commercial companies are also trading more often in the forex markets. The commercial companies such as Deutsche bank, UBS, Citigroup, and others such as HSBC, Braclays, Merrill Lynch, JP Morgan Chase, and still others such as Goldman Sachs, ABN Amro, Morgan Stanley, and so on are actively trading in the forex markets to increase wealth of stock holders. Many smaller companies may not be involved in the forex markets as extensively as some large companies are but the options are stil there.

Central banks are the banks that hold international roles in the foreign markets. The supply of money, the availability of money, and the interest rates are controlled by central banks. Central banks play a large role in the forex trading, and are located in Tokyo, New York and in London. These are not the only central locations for forex trading but these are among the very largest involved in this market strategy. Sometimes banks, commercial investors and the central banks will have large losses, and this in turn is passed on to investors. Other times, the investors and banks will have huge gains.

Forex Market Vs. Stock Market

You have probably traded stocks before, but have you ever traded currencies? Currency trading goes back thousands of years and was the first market used by nations, traders and merchants to facilitate the open market process. The trading of national currencies has its own market called the Forex, which is an abbreviation for The Foreign Currency Exchange Market. The Forex Market allows individuals, companies, banks, governments and nations to take advantage of currency fluctuations in the world market to profit from judging the correct direction a currency moves against another currency. Currencies are traded as currency pairs.

The Stock Market:

The stock market has been one of the more traditional ways to make a profit from an investment. You often hear how the stock market can make a person more money from an investment than just about any other market. While you can make double digit profits from the stock market, and it usually produces more of a return than CD's or bonds, it is not always the easiest market to participate in. With tens of thousands of companies to choose from when investing, it can be downright daunting. Of course you can stick with mutual funds or index funds and make low double digit gains; it is still difficult to perfect a system that can make more than 10 to 15% on a yearly basis. The stock market can be complicated to say the least. Not only do you have to really do your homework, but you never know when a company will decide to go bankrupt or fold altogether. Penny stocks are notorious for losing people money. The large cap stocks are decidedly better, but we all know what happens when a rogue CEO gets in trouble...the company's stock tanks. There is a lot of risk and uncertainty when trying to play individual stocks while going for 20 to 30% gains in short periods of time.

The Forex Market:

The Forex Market is a lot simpler and tame compared to the stock market. However, it can take more self education than the stock market since there aren't as many TV and radio shows dedicated to Forex or FX Trading. Since the Forex Market is an over the counter (OTC) market, by definition it is an open, worldwide market with no central trading floor. If it were a market that had one central trading floor, it would be unable to be open 24 hours a day for traders. By definition and not by obligation, the Forex Market is open to everyone and it is open 24 hours a day, five days a week.

Forex Trading takes place with currency pairs, which are two currencies that are traded in relation to each other. Some currency pairs are more popular than others, so the need to learn all of them, and there aren't that many, is not absolutely necessary. The key to trading Forex Markets is to develop a good strategy and stick to it. When you get to know a currency pair and your research points you to a certain position that you feel will make you a profit, you can then work that position all day and night if you wish. This allows for potentially much greater profits than you can find in the stock market. If you enjoy doing your own research and not simply following what everyone else does, then the Forex Market may be the perfect investment tool for you.

Wednesday, December 16, 2009

Dhananjay Mahendrabhai Patel