Forex Exchange Blog

Steve Welker asked:


Our modern futures market originated in the 19th century when farmers began selling contracts to deliver agricultural products at a later time. They did this to attempt to anticipate market needs and to smooth the supply and demand during the off-season.

The futures market has changed dramatically since then, in current times the futures market is no longer restricted to agricultural products. This worldwide commodities market now includes such things as manufactured goods and financial products as well as agricultural products. A futures contract is a guarantee that a certain product will be sold at a fixed price on a certain date.

When speculators play the futures market there is no expectation of the products being delivered and the actual goods are not even important. It is actually just the contracts themselves that are traded and the value of these contracts is in constant fluctuation.

In every futures contract there are two positions a long position and a short position. The short position is filled by the seller and the long position is the buyer. Futures accounts are settled on a daily basis.

As an example a farmer enters into a contract with a grocer to sale him 1000 bushels of corn at $10 a bushel. At the end of the specified time the contract is settled, if the current market price of corn is at $9 a bushel the farmer will realize an extra profit of $1000 dollars on the contract and the grocer will have lost the same amount. In this situation the farmer now sells his corn at $9 a bushel on the open market but his loss is covered by the profit from the contract. The grocer now will buy his corn for $9 a bushel but in reality he is still paying $10 a bushel because of the cost of the contract. If he had not entered into a contract he could have bought his corn for $9 and saved $1000. However if the price of corn had risen significantly to $13 a bushel he would have saved himself $3000.

Speculators try to guess the direction of the market fluctuations and make a profit by buying and selling contracts.

FOREX

The FOREX market has numerous advantages over the futures market. Since it is the largest financial market in the world it is far larger than the futures market. The FOREX market is also far more fluid, which makes it easier to execute stop orders with very little slippage.

The futures market is usually only open 7 hours a day where as the FOREX exchange is open 24 hours a day 5 days a week. This extra time makes the FOREX market more fluid and allows traders to take advantage of this by trading at any time instead of waiting for the markets to open.

There are no commissions in FOREX trades; the brokers make their profit through the spread. This is the gap between the currency buy price and selling price. In futures contracts the trader has to pay commission fees on every transaction.

Due to the extremely high volume of trades in the FOREX market most transaction are executed almost immediately, this allows for better price control of your trades. In future contracts the price the broker quotes will be from the last transaction and your price could be significantly different.

In the futures market debits are a constant possibility due to daily fluctuations. The FOREX exchange has many built-in safeguards in the trading system that helps protect the traders.



ROWLAND

ovedal123 asked:

http://full2.us/forexkiller

Download this amazing Forex System Software, It will generate signals for you and you can make a lot of money trading forex exchange, the software is a prof. signals analytical software so you can make your own forex trading signals, make lots of money using this signal software to forex trading

MEADORS

FXPartners asked:

Forex exchange rates and how they work

PROBST

Roman Sadowski asked:


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.



CREED

Jim Pretin asked:


The Foreign Exchange market (Forex) is truly the largest exchange in the world. The amount of dollars traded on the Forex market on a daily basis is in the trillions. Most of this currency trading takes place between between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. However, individual traders are starting to get in the mix, using internet discount brokers such as Etrade to participate in the currency exchange market.

There is no central exchange or meeting place for the Forex. All trading is done over computer networks between traders in different parts of the world. Also, unlike the stock market, the foreign exchange market is open 24 hours per day, because it is a global market. A trader in Hong Kong may be exchanging currency with a trader in Australia while an American trader is sleeping.

There are several different markets within the Forex exchange system. First, there is the spot market. The spot market deals with trades that are based on the current values of currencies. One person trades a certain amount of currency with another trader in exchange for an equivalent amount of a different foreign currency. Spot trades take two days for settlement.

The other two types of foreign exchange markets are the forward and futures markets. In the forward market, the buyer and seller agree on an exchange rate and a transaction date is set for a specific time in the future, at which point the trade is executed regardless of what the rates are at that time. On the futures market, futures contracts are bought and sold based upon a standard contract size and maturity date. Futures trades take place on public commodities markets.

A currency quote is listed differently from a stock quote. Stocks are quoted in terms of price per share. Currency exchange prices are listed as either a direct quote or an indirect quote. A direct quote uses the domestic currency as the base and the foreign currency as the quote. An indirect quote works the exact opposite way.

So, if you were to view a quote in an American newspaper that said USD/JPY = 75, that would be a direct quote and would mean that $1 of U.S. currency is equal to 75 Japanese yen. If that same quote appeared in that same American newspaper and was listed as JPY/USD = 0.013, that would be an example of an indirect quote.

As with stock prices, currency exchange prices have a bid and ask spread. The current bid is the amount of foreign currency that someone is willing to spend in order to buy $1 U.S. base currency. The ask is the amount of foreign currency that someone is demanding in order to be willing to sell $1 U.S. base currency.

The Forex markets are generally considered to be less volatile than then stock market because within the course of a trading day, it is highly unlikely for the value of a single currency to move all that much. With equities, it is not uncommon for a trader to buy a stock, and then a negative press release causes the stock to lose considerable value within a day or even a couple of hours. Sometimes, however, the Forex can be volatile. If there is a significant economic or political development with a certain country, the currency of that country can lose value quickly.

There is a higher degree of liquidity on the currency exchange then there is on the stock exchange because the currency exchange is open 24 hours per day and because the very nature of currency exchange is to bet on when certain currencies will go up or down; so, it is easy to sell your position in a certain currency even when the value of that money is going down. A plummeting stock is more difficult to unload, but not impossible.

If you want to begin currency tranding, try to set aside some money and open an account with an online broker. Start slowly, then as you get the hang of it, work your way up to larger trades and higher volume. However, do not gamble your nest egg on currency trading because inexperienced traders can lose everything they have rather quickly in spite of the relative safety of the Forex market.



LUNT

milan asked:


flow(I feel I have longterm covered). There are numerous stocklike investments on the internet ( forex,stocks,comodies, options, funds
and etc). Should I learn a SYSTEM or develop my OWN? Because there is SO much out there to invest in, it is confusing as to with one to learn.

DAFFIN

binesh20002001 asked:


forex trading means trading in foriegn exchange.

SWOYER

InterestedObserver asked:


Let’s say I deposit $500 into an account. The broker gives me 200:1 leverage. What can I buy on a EURUSD exchange with that? Some brokers automatically set a 100,000 unit buy? I don’t understand…

MARCHESE

Michbittelieben asked:


what does the fed buget signify? does it have a big impact on the exchange rate?

KRUK

Necip C asked:


I went to an introduction to FOREX (foreign exchange) class recently and they were telling us how with a good education in FOREX you can consistently make money, and good money too, since you are trading 50 or 100 times what you have in your trading account. The complete course is $2000 and they were pushy for us to take the class so I didn’t feel so confident about it, but i read up on the subject a bit and did a trial trade for about 30 days, I was up a lot at one point (about $8000) but in the end of the month i pretty muich broke even. WIth more knowledge and a proper education on the subject can it be a long term way of makin money?
DEAR ALL, thanks for your responses, overall you seem to think currency trading is high risk and not really a viable way of making money from home. I should have mentioned in my question that if i were to do it, i would want to rely more on technical analysis and all the ratios and different theorems etc. I would also be making trades that are from about 30 minutes to at most one day. Does this change anyones opinion on the subject?

DELAHANTY