The foreign exchange market or better known as FOREX is when one currency is traded for another country’s currency. It is an alternative form of business where the goods to be bought and sold are money itself using money.
In the past, people would normally engage in stocks and pool their savings in the money market to build up their investment portfolio.
Nowadays, with more than 1.5 trillion USD of FOREX being exchanged on a daily basis, even the “small-time” investor can participate in the FOREX market. There is leverage in the FOREX market where a minimum amount of currency can have access to a large deal of money.
A lot more advantages to study and dive into FOREX trading include the following:
Why FOREX?
24-hour trading
Compared to stocks, FOREX trading is twenty-fours. A FOREX trader can trade right away once they spot an opportunity to buy low and sell high. Remember, money has time value. And a lot of factors in the economics and politics of a government affect how low a currency will drop or how high a currency will gain. It is fairly easy to say buy low and sell high. But the trick is to know when to do it. With twenty-four trading, the FOREX trader has the ultimate advantage already. Since, after all, time is money.
High liquidity
A market or business is considered very liquid if the assets involved can enable the person to directly meet his payment obligations. In other words, if cash is at hand—immediately. What is a more liquid market than the FOREX market?
FOREX has high liquidity, because it can be traded swiftly, without considerable loss of value, and anytime within the trading hours or in FOREX trading’s case—24/7.
No commission
FOREX trading need not have brokers in between to facilitate. With other forms of money market ventures and stock trading, brokers come in handy; because they are able to handle varied forms of portfolios and company stocks for the investor. Even if FOREX trading is involved with multiple currencies, it is a very direct business where the trader himself can act on his own; thus no commissions are leaked out and all profits are kept!
Steady market availability
In all businesses, businessmen strive for a steady market, if not an increasing one. Why spend time in a trading scene when it is short-term?
Because FOREX trading is all about the buying and selling of currencies, it is a continuously moving market. Money make the world go round, as the cliché goes.
The market will always be there. The trader only has to be aware of the rising and falling of the currencies. When is the currency starting to be weak? When is it going strong? Is there a trend?
Taking action
This benefits and advantages all the more make FOREX trading a very attractive business venture. For first time FOREX traders, why not inquire now at your home bank on how to start making your money work for you? FOREX trading is the way to go.
السبت، 31 يوليو 2010
About Forex
How did the taipans and billionaires get so filthy rich?!
Besides the more obvious hard work and diligence and always saving little by little in their piggy banks, the really rich guys know how to work up the foreign exchange.
Basically, foreign exchange trading or simply FOREX trading is just the buying and selling of the world’s currencies. Money today is not the same as money tomorrow. Money has time value. The worth of a currency can go up or down.
There is one secret that FOREX traders live by. And it is buy low, sell high. Don’t ever forget that rule.
However, the trick is to know when to buy and when to sell. In FOREX trading, everything is by speculation. Sure, there are graphs to aid decisions. Business pages also give out strategies for the day. But the next step is always a guess based from the previous actions.
FOREX traders like to call their speculations as smart guesses. Usually, patterns on the currency values can be derived from how the politics of a specific country is running.
For example, if there is a plan to oust the president, most probably the value of that country’s currency will go down—how low, we don’t know. Usually. Because there are still a lot of factors to consider why a currency is going strong or not.
Improvement on the tourism sector can mean more foreign investments. This will be good for a particular currency, but this may affect how the other countries are doing.
These are just trade scenarios. As the cliché goes, one man’s medicine may be another man’s poison. One country’s good tidings may be another country’s, well, downfall.
That is why in FOREX trading, another secret to live by is to be aware of the national news in the country concerned.
Current events have a say on the economics of a country. Money makes the world go round, so to speak.
But, if one is truly serious in earning their first million in FOREX trading, another secret is—it might be a good idea to invest in a FOREX trading training school. Learn from the pros and conquer the world afterwards.
Let me leave you one last secret I learned from my father. If everyone is going in this direction, go the other way. This applies to FOREX and other areas of life. You won’t ever get rich by following the crowd.
Besides buying low and selling high, follow that last secret and you might just join the ranks of the taipans and billionaires.
Besides the more obvious hard work and diligence and always saving little by little in their piggy banks, the really rich guys know how to work up the foreign exchange.
Basically, foreign exchange trading or simply FOREX trading is just the buying and selling of the world’s currencies. Money today is not the same as money tomorrow. Money has time value. The worth of a currency can go up or down.
There is one secret that FOREX traders live by. And it is buy low, sell high. Don’t ever forget that rule.
However, the trick is to know when to buy and when to sell. In FOREX trading, everything is by speculation. Sure, there are graphs to aid decisions. Business pages also give out strategies for the day. But the next step is always a guess based from the previous actions.
FOREX traders like to call their speculations as smart guesses. Usually, patterns on the currency values can be derived from how the politics of a specific country is running.
For example, if there is a plan to oust the president, most probably the value of that country’s currency will go down—how low, we don’t know. Usually. Because there are still a lot of factors to consider why a currency is going strong or not.
Improvement on the tourism sector can mean more foreign investments. This will be good for a particular currency, but this may affect how the other countries are doing.
These are just trade scenarios. As the cliché goes, one man’s medicine may be another man’s poison. One country’s good tidings may be another country’s, well, downfall.
That is why in FOREX trading, another secret to live by is to be aware of the national news in the country concerned.
Current events have a say on the economics of a country. Money makes the world go round, so to speak.
But, if one is truly serious in earning their first million in FOREX trading, another secret is—it might be a good idea to invest in a FOREX trading training school. Learn from the pros and conquer the world afterwards.
Let me leave you one last secret I learned from my father. If everyone is going in this direction, go the other way. This applies to FOREX and other areas of life. You won’t ever get rich by following the crowd.
Besides buying low and selling high, follow that last secret and you might just join the ranks of the taipans and billionaires.
What is Forex (Foreign Exchange)?
Foreign Exchange (FOREX) is the arena where a nation's currency is exchanged for that of another. The foreign exchange market is the largest financial market in the world, with the equivalent of over $1.9 trillion changing hands daily; more than three times the aggregate amount of the US Equity and Treasury markets combined. Unlike other financial markets, the Forex market has no physical location and no central exchange (off-exchange). It operates through a global network of banks, corporations and individuals trading one currency for another. The lack of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one zone to another in all the major financial centers. Traditionally, retail investors' only means of gaining access to the foreign exchange market was through banks that transacted large amounts of currencies for commercial and investment purposes. Trading volume has increased rapidly over time, especially after exchange rates were allowed to float freely in 1971. Today, importers and exporters, international portfolio managers, multinational corporations, speculators, day traders, long-term holders and hedge funds all use the FOREX market to pay for goods and services, transact in financial assets or to reduce the risk of currency movements by hedging their exposure in other markets. MG Financial, now operating in over 100 countries, serves all manner of clients, comprising speculators and strategic traders. Whether it’s day-traders looking for short-term gains, or fund managers wanting to hedge their non-US assets, MG's DealStation™ allows them to participate in FOREX trading by providing a combination of live quotes, Real-Time charts, and news and analysis that attracts traders with an orientation towards fundamental and/or technical analysis.
Foreign exchange market
The foreign exchange market (forex, FX, or currency market) is a worldwide decentralized over-the-counter financial market for the trading of currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.[1]
The primary purpose of the foreign exchange market is to assist international trade and investment, by allowing businesses to convert one currency to another currency. For example, it permits a US business to import British goods and pay Pound Sterling, even though the business's income is in US dollars. It also supports speculation, and facilitates the carry trade, in which investors borrow low-yielding currencies and lend (invest in) high-yielding currencies, and which (it has been claimed) may lead to loss of competitiveness in some countries.[2]
In a typical foreign exchange transaction a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market started forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.
The foreign exchange market is unique because of its
huge trading volume, leading to high liquidity
geographical dispersion
continuous operation: 24 hours a day except weekends, i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday
the variety of factors that affect exchange rates
the low margins of relative profit compared with other markets of fixed income
the use of leverage to enhance profit margins with respect to account size
As such, it has been referred to as the market closest to the ideal of perfect competition, notwithstanding market manipulation by central banks.[citation needed] According to the Bank for International Settlements,[3] average daily turnover in global foreign exchange markets is estimated at $3.98 trillion, as of April 2007. $3.21 Trillion is accounted for in the world's main financial markets.
The $3.21 trillion break-down is as follows:
The primary purpose of the foreign exchange market is to assist international trade and investment, by allowing businesses to convert one currency to another currency. For example, it permits a US business to import British goods and pay Pound Sterling, even though the business's income is in US dollars. It also supports speculation, and facilitates the carry trade, in which investors borrow low-yielding currencies and lend (invest in) high-yielding currencies, and which (it has been claimed) may lead to loss of competitiveness in some countries.[2]
In a typical foreign exchange transaction a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market started forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.
The foreign exchange market is unique because of its
huge trading volume, leading to high liquidity
geographical dispersion
continuous operation: 24 hours a day except weekends, i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday
the variety of factors that affect exchange rates
the low margins of relative profit compared with other markets of fixed income
the use of leverage to enhance profit margins with respect to account size
As such, it has been referred to as the market closest to the ideal of perfect competition, notwithstanding market manipulation by central banks.[citation needed] According to the Bank for International Settlements,[3] average daily turnover in global foreign exchange markets is estimated at $3.98 trillion, as of April 2007. $3.21 Trillion is accounted for in the world's main financial markets.
The $3.21 trillion break-down is as follows:
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