Forex Exchange Blog

Chris T asked:


2 trillion dollars traded each and every day. 400:1 on your money. Currency is not easily manipulated, unlike corporations. With proven systems available to the average Joe, why is this forum not loaded with questions pertaining to the foreign currency exchange market?

HADDOCK

Christopher Sands asked:


I have several people using my charts and indicators to trade. A lot of these people ask if I can recommend a good broker for trading on the Foreign Currency Exchange (forex). I’d like to associate myself with a good broker who offers an IB program - basically, an affiliate or referral program, whereby they sign up to my broker that I have a deal with, and I get a kickback from the commission.

Does anyone have info on how this can be accomplished in the US?

Thanks!
FX Solutions does not support MetaTrader 4, but thanks anyway.

SIMMONS

John Howard asked:


Lets first get to the introduction of forex. FOREX is an international online currency exchange that was established in 1971. It is now the premier foreign currency exchange market in the world, with an average daily trading volume reaching as high as one and a half trillion. Three types of traders make use of FOREX-banks, individuals, and corporations. When they have needed to exchange currency online, FOREX Online Currency Trading is the number one place to do it.

Mostly people think that why should they do online currency trading with FOREX? The answer is that there are two basic reasons to do your online currency trading with FOREX. First and foremost, FOREX online currency trading is done to make a profit. Depending on the market, a bank, corporation, or individual can make a windfall profit through FOREX online currency trading. Another reason to do currency trading is to get into a secured position by eliminating trading risks arising from foreign exchange rate movement. In other words, FOREX online currency trading can help a bank, corporation, or individual to weather changes in foreign exchange rates by already having the foreign currency they need on hand.

FOREX is unique in terms of trading exchanges. Rather than the typical exchange like Wall Street or the Tokyo Exchange, FOREX is an entirely digital foreign currency exchange system. The rate of foreign exchange changes so quickly those traders must be able to react to market shifts within seconds. Online FOREX currency trading makes this possible by eliminating the classic stock broker. Rather than trading telephone calls and trying to catch a great deal by shouting and waving papers, FOREX trading is accomplished with a touch of a button on the computer.

The ease of online FOREX currency trading appeals to many, both businesses and individuals alike. All the information one needs to get started with FOREX trading is available online. FOREX exchange rates are continually updated on many websites. It is simple to buy one currency when it is low and sell it when it is high. However, what goes up can also come down, and new traders on the FOREX online markets must be prepared for losses. Still, despite the risks, more and more people are participating in online FOREX trading every day.

Keeping updated with the world market is the best way to prevent losses with currency trading. Learning which countries are experiencing economic growth or recession is essential to make the best currency trading decisions. It is always good to invest in currency from nations who are experiencing growth. Likewise, avoiding countries that are historically unstable or are experiencing war or international economic sanctions is only wise. FOREX online currency trading is not for everyone, but with some knowledge and skill, it can be very lucrative.



KOHNEN

b.o.r.e.d asked:


Hi,

I am going to India on a holiday. Where do you think I will get better exchange rates?

What are some of the places I can do it in Australia? I’ve heard about Forex, but the rates are too high!

What are the rates at Commonwealth bank? Or should I just do that in India? thanks.

KEENAN

platinum man asked:


There are tons of ads for courses for FOREX online, but they cost hundreds of dollars, and there is always an element of suspicion around them. I am looking for simple, basic, and clear instruction course which is not designed to sell me this and that. Naturally, I will pay, but within reason.

CULLIGAN

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.



BREIER