Forex Exchange Blog

Justin Stewart asked:


For those who have never heard of foreign exchange, also known as forex, they may be incredibly confused when you explain to them that investors buy, sell, and trade currencies. They may be even more confused to hear that the exchange rates for these currencies rely on the forex market and the way that investors view the currencies around the world. Those who begin to get into forex trading and investing may find that it can be even more confusing to determine what kind of investment to go with. There are multiple ways to have a transaction in the forex world. Some people may not understand the pros and cons between each, and why they may want to go with a certain forex transaction type over another. By trying to understand the top 5 transactions made on the forex market, you may better understand what you may want to do with your own investment.

Forward Transaction

A forward transaction is a transaction that is made for the future; this means that the money does not actually come into play until a future date. The buyer and seller agree on a specific, stuck exchange rate for that certain date in the future. Because of the fixed date, the rate is stuck to the choice on that day. The actual market numbers on the day of the transaction do not matter, as the fixed rate cannot be changed. There is no limit on the extent of a future forward transaction, as it is dependent on the buyer and seller alone.

Spot Transaction

The spot transaction is the quickest and fastest way to actually exchange your currency. There is an exchange of two currencies over a two day period on the forex exchange, meaning that no contracts are signed. This allows the transaction to happen at a faster pace.

Future Transactions

These transactions are also forward transactions, and deal with contracts much like the normal forward transactions. The contracts usually deal with a certain amount by a certain date, rather than on a certain date. The contract lasts for the time specified, and are major on the forex market.

Swap Transactions

Swap transactions are easily the most normal and common of the multiple ways to do transactions on the forex market. Swap transactions are also forward transactions, but they do not happen as a trade through the forex market itself. A swap transaction can be confusing at first, two investors agree to change currencies for a certain amount of time. A later date is set for the two investors to change currencies back.

Option Transactions

Option transactions in the forex market common. The foreign exchange options give an investor the right (or option) to exchange money on the forex market. This option has a fixed exchange rate and a specific date. The option transaction is the most prominent in the forex market because of the high traffic and amount of money that is sunk into the currency forex market daily.



DRAKEFORD

dv8usa asked:


I used to get alerts sent to my cell phone by yahoo finance. The alerts were time delayed but still it helped me, then Yahoo finance improved their site and now I can not get that information. I used to get quotes for EUR/USD AND USD/CHF AND GBP/USD. Any idea how I can that information again??

VANWERT

Michael Williams asked:


In the Forex market the value of two separate currencies and how they relate to one another is what is known as the Forex exchange rate. Usually the Forex rate is how much of one currency is needed to buy a unit of another. Knowing the basics regarding the Forex exchange can help you get started in understanding it even better.

Just to give you an example of how the Foreign exchange rate can work and to help you better understands it we can compare the United States dollar with the Japanese yen. Let’s say that on a certain day the US dollar is able to buy one hundred and ten Japanese yens, this would indicate that the exchange rate for that day is 1:110 or a one to one hundred and ten ratio. This ratio in the exchange rate is also known as pairing. When you take it vice versa you can use it to indicate how many US dollars a single unit of Japanese yen can buy. Another term that is used in the Foreign exchange rate is ‘cross rates’. This term however is only used when it does not involve US dollars; it is only used when relating two foreign currencies.

A few other terms used in the Forex exchange are pips or basis points, which are actually two terms used for the same thing. These terms are used to indicate Forex rates that are calculated up to four decimal points and whether or not these are negative or positive movements. An example of this would be if you were to exchange euros with yen at a value of 135.1030, but then the euro rate goes up to 135.1035, it is called a five-pip improvement.

In using the Forex exchange rate you are required to use two currencies and this means they are quoted as ‘two tier’ rates. Also in the Forex market its price basis is called a bid/ask. Using the previous ratio between the yen and the US dollar in the Forex market, if this trade is made it is called a ten pip ’spread’ and is secured. This term means it indicates the difference between the buying and actual selling price.

A lot of things can change the spread and affect it. These things include market conditions and traders’ instincts about the strength of certain currencies, which can fluctuate greatly from day to day. One thing you should remember however when it comes to the Forex is that only Forex traders who are licensed can access official quoted rates. This means therefore that smaller investors may not receive their currency at a very good rate, because they usually receive them from commercial banks.

One last thing concerning the Forex exchange rate is that it is independently determined. This is why it thrives so well, because solely buyers and sellers and their supply and demand of certain currencies determine it. In the end individual governments and banks cannot decide the values.

With the benefits and knowledge of how the Forex exchange works you can decide if entering the Forex market is the right move for you. But with all the advantages of Forex, why wouldn’t you want to?



BRILEY

andrew asked:


If you have over 1 yr experience in forex trading we are getting a group together .exchange ideas and resources . 5 heades are better than 1 i think . you can contact me on yahoo messenger
watchdaride@yahoo.com

FULMORE

A traczion asked:


Advanced Currency Markets (ACM) is an online currency trading company that offers currency trading services, relevant analysis and market information, forex software, a 24-hour help desk and online forex trading facility to its clients. You can trade in the online forex market through our web-based applications. All our applications require a one-time download, are very space-efficient and easily get stored on your hard drive. Our software is stable, easy to install and provides regular automatic updates. We are concerned about the security of your data and ensure that you have a very secure platform to execute your foreign currency exchange transactions. Our 128-bit SSL encryption offers you a safe and robust online dealing platform, accessible 24-hours, from just about anywhere in the world.

At ACM, we understand your different trading needs and thus offer spot foreign exchange trading and spot gold/silver trading. If you are new to forex, you may open a demo or a practice account with us and use our trading platform to gather some hands-on trading skills. If you feel you have what it takes to trade in the online forex market, you can open a live account with us. You may set up a mini account with an initial deposit of minimum USD 2000 or equivalent or a standard account with a minimum initial deposit of USD 5000 or equivalent. We also have an institutional forex trading account that can be set up with a minimum initial deposit of USD 50,000 or equivalent. For more information about our account types, log on to www.ac-markets.com.

Lets take a quick look at our online forex trading process. A customer provides us information about the deal size and the currency pair. In return, we provide, a bid and an ask price. The customer may take one of these two prices or may ask us for a re-quote. Once our customer gives us the price, we confirm the trade in just about 5-10 seconds. The client may even place a limit order and ask us to buy or sell at a specified price. This helps him to enter the market, add to a pre-existing position and assists profit making. If a client wishes to restrict his loss potential on a particular transaction, he can give us a stop order and we can buy or sell at the specified price.

When you trade with ACM, you enjoy several benefits. You get a choice of 27 tradeable currency pairs to choose from. The price you click is the price you get, which means no risk of slippage. A simple one-click is all it takes to execute a transaction. Our 1% margin provides our customers with the level of risk they are willing to take. Our secure website ensures that you conduct all your online forex trading with complete peace of mind. We offer the most efficient and best services in the online currency trading market and charge no commission whatsoever. Our Online Trading Academy can help you enhance your knowledge and skills through our free online classes. For detailed information about our services and our training program, please visit www.ac-markets.com.



LAMPRECHT

tunde asked:


What is FOREx all about?

The Forex market is a non-stop cash market where currencies of nations are traded, typically through brokers. Foreign currencies are constantly and simultaneously bought and sold across local and interntional markets and traders’ investments increase or decrease in value based upon currency movements of foreign exchange.Foreign exchange exists wherever one currency is traded for another. It is the largest financial market in the world,The average daily trade in the global forex and related markets currently is over US$ 7 trillion.

It is a 24-hour trading, 5 days a week with non-stop access to global Forex dealers. An enormous liquid market making it easy to trade most currencies. Volatile markets offering profit opportunities. Standard instruments for controlling risk exposure. The ability to profit in rising or falling markets. Leveraged trading with low margin requirements. Many options for zero commission trading.

Market size and liquidity



The foreign exchange market is unique because of

its trading volumes,

the extreme liquidity of the market,

the large number of, and variety of, traders in the market,

its geographical dispersion,

its long trading hours: 24 hours a day except on weekends (from 5pm EST on Sunday until 4pm EST Friday),

the variety of factors that affect exchange rates.

the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)

the use of leverage



Foreign exchange market turnover, 1988 - 2007, measured in billions of USD.

As such, it has been referred to as the market closest to the ideal perfect competition, notwithstanding market manipulation by central banks. According to the BIS, average daily turnover in traditional foreign exchange markets is estimated at $7.28 trillion. down as follows:

Market participants

Unlike a stock market, where all participants have access to the same prices, the forex market is divided into levels of access. At the top is the inter-bank market, which is made up of the largest investment banking firms. Within the inter-bank market, spreads, which are the difference between the bid and ask prices, are razor sharp and usually unavailable, and not known to players outside the inner circle. As you descend the levels of access, the difference



CULBERSON