FOREX is the world's largest and most liquid trading market. Many consider FOREX as the best home business you can ever
venture in. Even though regular people have had the opportunity to take part in trading foreign currencies for profit (in the
same way banks and large corporations do) since 1998, it is just now becoming the cool, hip, new "thing" to talk about at parties, business events, and other social gatherings.
Even though it has been somewhat of a loosely guarded secret, every day more and more investors are turning to the
all-electronic world of FOREX trading for income and profit because of its numerous benefits & advantages over
traditional trading vehicles, like stocks, bonds and commodities.
But, still, whenever something seems new or is just becoming a part of social conversation, news articles, and water cooler
gossip, misconceptions have to be overcome, the mind has to be open and the slate has to be clear for starting out fresh with the CORRECT information.
So, in this article, it is my attempt to give you some solid, but not over-detailed, information on just what the heck "FX" (FOREX) means, what it is, and why it exists.
As a successful trader said, Trading FOREX is like picking money up off the floor. Not trading FOREX is like leaving it
there for someone else to pick up." Others in the industry have also said, Trading FOREX is like having an ATM machine on your own computer.
Here's an explanation (one I feel you'll appreciate) of what FOREX is and how a bunch of traders, profit from it:
The Foreign Exchange Market, also referred to the "FOREX" or "FX" market, is the spot (cash) market for currency.
But, don't mistake FX as trading the futures market, where you buy a contract to purchase a particular currency at a future price in time.
What FX traders do is much less risky than trading currencies on the futures market, much more profitable, and a lot easier, than trading stocks.
So, you're probably wondering where it's at ... or ... how to access the FX market?
The answer is: FX Trading is not bound to any one trading floor and is not centralized on an exchange, as with the stock
and futures markets. The FX market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact
that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.
Yes, if that's the first time you've heard about an all-electronic market, I know this may sound somewhat intriguing to you.
Here's what you are actually trading when you participate in the Foreign Exchange (FOREX) market:
Essentially, like the large banks who use the FX market to protect themselves from the fluctuating exchange rate of
different currencies, as an investor, what a FX trader is doing is simultaneously exchanging one countries currency for another.
So, in actuality, they're electronically trading a currency-pair and the price that is quoted to us is the exchange rate between the two currencies.
In other words, simply the quoted price is how many of the one currency is worth 1 of the other currency.
Example:
EUR/USD last trade 1.2850 - One Euro is worth $1.2850 US dollars. The first currency (in this example, the EURO) is
referred to as the base currency and the second (/USD) as the counter or quote currency.
The FOREX has a DAILY trading volume of around $1.5 trillion dollars - 30 times larger than the combined volume of all U.S.
equity markets. This means that 1,498,574 skilled traders could each take 1 million dollars out of the FOREX market every day and
the FOREX would still have more money left than the New York Stock exchange every day!
The FOREX plays a vital role in the world economy and there will always be a tremendous need for the FOREX. International
trade increases as technology and communication increases. As long as there is international trade, there will be a FOREX
market. The FX market has to exist so a country like Japan can sell products in the United States and be able to receive Japanese Yen in exchange for US Dollar.
There's plenty of money to be made using FOREX for plenty of traders that use the right trading techniques / tactics that will
allow them to profit immensely. And, with only 5% of the daily turnover of volume coming from banks, government and large
corporations who need to hedge, the other 95% is for speculation and profit.
Sri Lanka Rupee, Stocks Drop After Currency Trading Band Removed Bloomberg The central bank narrowed the currency's trading band against the dollar on Feb. 3 and Feb. 6 and today, prior to announcing its removal. The monetary authority raised benchmark interest rates for the first time since 2007 on Feb.
India Eases Currency Trading Limits for Some Banks Wall Street Journal By SUDEEP JAIN MUMBAI -- India's central bank has asked banks to approach it individually for relaxing some foreign currency trading limits and has already eased restrictions for some banks, a top official said Monday. "Some limits, based on their ...
iFOREX Adds Oil to its list of Tradable Commodities MarketWatch (press release) ROAD TOWN, Tortola, Feb 09, 2012 (BUSINESS WIRE) -- Leading currency trading company, iFOREX, has recently expanded its services, giving all Forex trading accounts direct access to oil CFDs. Targeting an audience that has little or no experience with ...
This January Azerbaijan's exchange currency trading totaled $82.5 million Azerbaijan Business Center Baku, Fineko/abc.az. The Baku Interbank Stock Exchange (BBVB) has renewed statistics of its operations. BBVB reports that in January 2012 the nine participating banks concluded 28 deals in 36 trading sessions in e-trading system (BEST).
FOCUS: Technology Buoys Retail Currency Trading, Reshapes Old Models Wall Street Journal By Eva Szalay Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Retail foreign-exchange trading is emerging as one of the biggest growth areas in the currencies space, and some of the trading firms that facilitate these flows are building up a whole new ...
Morgan Stanley Currency-Trading Head Stephen Mettler Leaves Bank BusinessWeek By Michael J. Moore Jan. 26 (Bloomberg) -- Stephen Mettler, who oversaw Morgan Stanley's interest rates and foreign-exchange trading businesses, has left the bank. Mettler, who joined the firm in 1997, retired, according to an internal memo obtained by ...
Bank of England and ECB Hold Steady, Indonesia Cuts CNBC.com [CNBC] ----------------------- MULTI CURRENCIES VS THE DOLLAR Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm. Learn more: The essential vocabulary for currency trading is on Key Currency ...
RELATED ARTICLESForex Market Overview
"FX" is an abbreviation of "forex" or "foreign exchange."
Foreign exchange is the largest and most liquid market in
the world trading approximately $2 trillion every day
(that's over 30 times the daily volume of NASDAQ and NYSE
combined).
Factors Influencing a Currency Pair Exchange Rate
Introduction: The exchange rate refers to the value of the US
dollar against the values of currencies of other countries.
Such a rate helps determine how much we pay for imported
goods and services and how much we receive for what we
export, among other things.
Forex Signal, Forex Signals Advice
There are lot's of Forex signals providers out there. New
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The foreign exchange currency market is the largest market
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6 Critical Factors For Successful Trading
Success in any profession can be broken down into a number
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The Meaning of FOREX Price Charts and How to Use Them
There is one very important factor that you should consider
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The Major Players in the Foreign Currency Exchange Market - FOREX
Since the US dollar is the centerpiece of the market, it is
normally considered the 'base' currency for quotes. In the
"Majors", this includes USD/JPY, USD/CHF and USD/CAD.
How Do Other Countries Devalue Their Currencies?
Countries devalue their currencies only when they have no
other way to correct past economic mistakes - whether their
own or mistakes committed by their predecessors. The ills of
a devaluation are still at least equal to its advantages.
Forex Profits
The Forex Market-What, When and Why? Forex, FX and the Forex
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Exchange market. Actually it is the largest financial
market in the world, where money is sold and bought freely.
How To Control Fear And Greed In Trading
There is an old saying that the market is driven by fear
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Forex Made Easy for Everyone
Forex made easy is as simple as you would want it to be.
The foreign exchange market is a worldwide market and
according to some estimates is almost as big as thirty
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Writing A Trading Plan
All professional traders have a trading plan. Trading
futures is a zero sum game and those with a plan (and the
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Forex Signal Services
What are Forex signals? Forex signals are paid services
offered by some brokers and independent Forex annalists.
Companies that offer forex signals monitor and analyze the
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Stock Market Report: Day Trading or Swing Trading Online? Stock Investing Information
Profitable day traders recognize that momentum trading is
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A Short Introduction To FOREX
FOREX is the world's largest and most liquid trading
market. Many consider FOREX as the best home business you
can ever venture in.
A Look at Forex Market Makers
The investor in the currency market takes for granted that
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executed within seconds.
Where to Get Forex Training
For those of you who are interested in forex trading, you
may want to start off by getting some good forex training.
Forex training is a necessity for anyone with this
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Example of a Profitable Transaction in FOREX
To make a profit, in the FOREX, a trader can enter the
market as a *buy position* (known as going "long") or a
*sell position*(known as going "short"). For discussion,
let's assume you've been studying the EURO.
Internet and Computer Systems in the FOREX Business
With every passing year the interest in electronic trading
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Money Management, Part 2
FEARING LOSSES: There is a huge difference between being risk
averse and fearing losses. You must hate to lose.
MORE RESOURCES updated Thu. February / 09 / 2012
