To start getting income from foreign exchange market (Forex), you don’t need to have any financial experience. You just need to find your way in the multitude of possibilities offered for those looking for profit from national currencies rate variations. The point of classic Forex trade, meant to get a quick income, is simple (which hardly differs from other markets): you have to sell on higher price what you’ve bought on lower price.
But to get a grip on currency rates, you need more than simple mathematics. First thing, you have to learn all definitions: Besides the correct meaning of terms “currency” and “rate”, you need to know what “quotation” means, along with “currency pair” (which consists of base and counter currencies). You need to know what are “point”, “spread”, “trend”, “position” etc. Every action on Forex market is preceded by an analysis. Depending on its functions, the analysis can be fundamental (when the economic dynamics of a country are being studied thoroughly, along with prognoses on its changes), or technical (when we apply a mathematic approach to the graphs of currency rate fluctuations).
The trade on Forex market goes on twenty-four hours a day. Saturday and Sunday are traditionally considered days of rest. The same as for all the other markets, work on Forex market uses a certain set of strategies, methods and techniques. There are rules you have to try and follow, and there are things you shouldn’t do. Every market session (Asian, European and American) has its own law and established traditions, which you also have to learn about.
And finally, for the trade on Forex market you need to use certain tools (software, papers etc.) without handling which the theoretical knowledge will be useless
Sunday, February 28, 2010
FOREX MARKET
Forex is an economic term, short for the foreign exchange market, the largest world market by today. This market is the most liquid and unpredictable of all, not only because of its geographical spread and the variety of persons and organizations working here, but also because of a huge amount of factors affecting it. One also has to remember that Forex market is not a stock exchange. It does not have any trade institutions or areas.
The foreign exchange market, now known by the name of Forex, started its functioning in 1971, in response to forming dependencies in national currency rates. On March, 1973, the fixed rates system was replaced by more flexible system of floating rates. Because of this, the importers and exporters (with the financial institutions concerning them) had to take their places on the newly established market. The role of central banks much increased: they now had the possibility to affect currency rates, thus influencing the common economy of the state.
Forex market is based on the system of various institutions, which are various central banks, investment banks, banks of commerce, private dealer and broker networks, transnational corporations, pension funds, insurance companies etc. Like every international market, Forex always corrects itself, modifying rates the most liquid currencies the way they correspond the current balance of demand and supply.
The most popular possibility of getting an income by trading on Forex market is really called a marginal trade based on speculation on the fluctuations of liquid currency rates. This kind of activity becomes available for a private person in collaboration with a bank of commerce, a broker or a dealing center providing such services. There are many books and articles on Forex market, as well as the trade on it.
The foreign exchange market, now known by the name of Forex, started its functioning in 1971, in response to forming dependencies in national currency rates. On March, 1973, the fixed rates system was replaced by more flexible system of floating rates. Because of this, the importers and exporters (with the financial institutions concerning them) had to take their places on the newly established market. The role of central banks much increased: they now had the possibility to affect currency rates, thus influencing the common economy of the state.
Forex market is based on the system of various institutions, which are various central banks, investment banks, banks of commerce, private dealer and broker networks, transnational corporations, pension funds, insurance companies etc. Like every international market, Forex always corrects itself, modifying rates the most liquid currencies the way they correspond the current balance of demand and supply.
The most popular possibility of getting an income by trading on Forex market is really called a marginal trade based on speculation on the fluctuations of liquid currency rates. This kind of activity becomes available for a private person in collaboration with a bank of commerce, a broker or a dealing center providing such services. There are many books and articles on Forex market, as well as the trade on it.
Friday, February 26, 2010
Coveted position in forex, gold
In its efforts to improve foreign exchange reserves, India has now become the 10th largest gold-holding nation in the world. It has also emerged as the fourth-largest foreign exchange reserves holder only after China, Japan and Russia, says the Economic Survey 2009-10.
“In September last, the International Monetary Fund decided to sell 403.3 tonnes of gold as a central element of its ‘New Income Model' and to increase its resources for lending to low-income countries.
“Consequent of this, the Reserve Bank of India concluded the purchase of 200 tonnes of gold from the IMF at the cost of $6.7 billion as part of its foreign exchange reserves management operation,” the survey says.
“With this purchase, gold holdings in the country's foreign exchange reserves have increased from 357.7 tonnes to 557.7 tonnes, which is about 6 per cent of the reserves. Post-purchase, India has become the 10th largest official gold-holding country in the world,” it adds.
In another interesting development, India is ranked fourth in terms of foreign exchange reserves at $283.5 billion, only behind China ($2,399.2 billion), Japan ($1,049.4 billion) and Russia ($439 billion), says the Economic Survey.
Dollar dips on US economic data, easing Greece fears
NEW YORK - The dollar weakened against other major currencies on mixed US economic data and easing fears about Greece's fiscal crisis.
The euro traded at 1.3626 dollars at 2200 GMT in New York, up from 1.3546 late Thursday.
The dollar also weakened against the Japanese currency, sliding to 88.81 yen from 89.09 yen.
The euro firmed against the dollar as market fears about Greece's sovereign debt crisis faded slightly following reports of a possible helping hand from a German bank.
The modest improvement in risk sentiment weighed on the dollar, typically considered a safe-haven currency in times of uncertainty.
"We're probably seeing some profit taking" by investors who had speculated on a decline in the euro, said Vassili Serebriakov of Wells Fargo Bank, who pointed out the action could have been stepped up as the month draws to an end.
"The move appears corrective at this point; the market has not changed its mind on the euro," he said.
The analyst said the European single currency found support from "press reports that a German state-controlled bank may be buying Greek debt, and helping Greece with its debt."
The dollar, meanwhile, faltered as the market digested mixed US economic reports.
Fourth-quarter gross domestic product growth was revised upward to 5.9 percent from 5.7 percent, the Commerce Department said, in a report signaling positive momentum entering 2010.
The slight upward revision to GDP -- a broad measure of the country's goods and services output -- surprised most analysts who had expected no change in the first estimate.
But Kathy Lien at Global Forex Trading pointed out negatives in the GDP report.
"For GDP, personal consumption was revised down along with the price index," she said. "This is the story of the US economy -- growth with pockets of weakness."
A separate report Friday highlighted the persistent troubles in the housing market.
Sales of existing homes, by far the largest share of the market, fell 7.2 percent in January but were 11.5 percent higher than a year ago, the National Association of Realtors said.
"Under normal market conditions, a positive GDP report would trump a negative existing-home sales report. The fact that it didn't today reflects the extent to which the market has become bearish over the past several months," said Michael Woolfolk at Bank of New York Mellon.
Nick Bennenbroek, head of currency strategy at Wells Fargo Bank, said the dollar's weakness Friday and its mixed trading over the course of the week reflected an indecisive week for the forex markets.
"We suspect that corrective currency activity will be brief however. Markets will continue to anticipate the next Greek government bond issue as a key signal for the euro's direction, while next Friday sees the always important US jobs report," he said.
Over the medium term, he said, the bank's outlook remains for a firmer dollar against the majors. "We would use periods of dollar weakness as a buying opportunity
The euro traded at 1.3626 dollars at 2200 GMT in New York, up from 1.3546 late Thursday.
The dollar also weakened against the Japanese currency, sliding to 88.81 yen from 89.09 yen.
The euro firmed against the dollar as market fears about Greece's sovereign debt crisis faded slightly following reports of a possible helping hand from a German bank.
The modest improvement in risk sentiment weighed on the dollar, typically considered a safe-haven currency in times of uncertainty.
"We're probably seeing some profit taking" by investors who had speculated on a decline in the euro, said Vassili Serebriakov of Wells Fargo Bank, who pointed out the action could have been stepped up as the month draws to an end.
"The move appears corrective at this point; the market has not changed its mind on the euro," he said.
The analyst said the European single currency found support from "press reports that a German state-controlled bank may be buying Greek debt, and helping Greece with its debt."
The dollar, meanwhile, faltered as the market digested mixed US economic reports.
Fourth-quarter gross domestic product growth was revised upward to 5.9 percent from 5.7 percent, the Commerce Department said, in a report signaling positive momentum entering 2010.
The slight upward revision to GDP -- a broad measure of the country's goods and services output -- surprised most analysts who had expected no change in the first estimate.
But Kathy Lien at Global Forex Trading pointed out negatives in the GDP report.
"For GDP, personal consumption was revised down along with the price index," she said. "This is the story of the US economy -- growth with pockets of weakness."
A separate report Friday highlighted the persistent troubles in the housing market.
Sales of existing homes, by far the largest share of the market, fell 7.2 percent in January but were 11.5 percent higher than a year ago, the National Association of Realtors said.
"Under normal market conditions, a positive GDP report would trump a negative existing-home sales report. The fact that it didn't today reflects the extent to which the market has become bearish over the past several months," said Michael Woolfolk at Bank of New York Mellon.
Nick Bennenbroek, head of currency strategy at Wells Fargo Bank, said the dollar's weakness Friday and its mixed trading over the course of the week reflected an indecisive week for the forex markets.
"We suspect that corrective currency activity will be brief however. Markets will continue to anticipate the next Greek government bond issue as a key signal for the euro's direction, while next Friday sees the always important US jobs report," he said.
Over the medium term, he said, the bank's outlook remains for a firmer dollar against the majors. "We would use periods of dollar weakness as a buying opportunity
Forex trading sends dollar and yen lower
The dollar and the yen have both fallen during forex trading today (February 26th), as investors turned their attention to higher-yielding assets amid hope that the global economy is showing signs of recovery.
Bloomberg reports that the greenback was down to $1.3578 per euro at 06:42 GMT in London, having fallen against 14 of its 16 global counterparts.
The yen dropped to 89.32 against the dollar and 121.30 versus the euro, as demand for other currencies was boosted by increases on the Asian stock markets and news that the Reserve Bank of Australia saw loans offered by banks jump 0.4 per cent in January.
Barclays' Masafumi Yamamoto observed that this will cause the Australian dollar to "gain versus the dollar and the yen".
The pound is another currency that has fallen in value this week, dipping to a nine-month low against the dollar due to concerns that the recovery of the UK's economic is not progressing at the rate than had been forecast.
Bloomberg reports that the greenback was down to $1.3578 per euro at 06:42 GMT in London, having fallen against 14 of its 16 global counterparts.
The yen dropped to 89.32 against the dollar and 121.30 versus the euro, as demand for other currencies was boosted by increases on the Asian stock markets and news that the Reserve Bank of Australia saw loans offered by banks jump 0.4 per cent in January.
Barclays' Masafumi Yamamoto observed that this will cause the Australian dollar to "gain versus the dollar and the yen".
The pound is another currency that has fallen in value this week, dipping to a nine-month low against the dollar due to concerns that the recovery of the UK's economic is not progressing at the rate than had been forecast.
EURUSD Weekly Summary: False breakout or further upside correction?
The EURUSD made another indecisive movement this week. Price attempted to push higher, topped at 1.3691 on Tuesday but still closed below 1.3650 on Friday indicating limited upside corrective pressure. On daily chart below we can see that price slipped above the minor bearish channel but closed lower around the upper line of the minor
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