How currency exchange market works?
Forex is the only market in the world which is working 24h/5days in a week, there are four regional markets: Australian, Asian, European and American. The speed in completing transactions, very little costs, and high liquidity, all these factors make this market more Exciting circulation markets for its clients. It is composed simply of a global network linking tremendous number of currency traders worldwide. There is no traditional Bourse known in sense of the word.
What are the currencies symbols?
USA Dollar (USD)
Union Euro (EUR)
Pound sterling (GBP)
Swiss franc (CHF)
Japanese Yen (JPY)
Australian dollar (AUD)
New Zealand dollar (NZD)
Canadian dollar (CAD)
What is the meaning of the word couple?
Circulation of currencies in forex is done by couples. Example: Euro / dollar or dollar / yen. When you sell couple that’s mean you sell the first currency and buy the second in this couple. Most couples are:
EUR / USD
USD / JPY
GBP / USD
USD / CHF
EUR / GBP
NZD / USD
EUR / CHF
AUD / USD
EUR / AUD
CAD / AUD
CAD / JPY
EUR / JPY
GBP / JPY
CHF / JPY
EUR / AUD
What is spread?
Spread is difference points between sell and buy. It is usually ranges between 3 to 5 points (pips) in the main couples, and often differs from company to another. The amount of point vary from couple to another, (in example and in normal account), in GBP / USD couple the point amount is 10 dollars but in EUR / GBP it is little less than 20 dollars ;that’s mean when the price move you will win or loss 10 dollars for each 1 point change in couple price.
How can we predict the direction of prices?
Forecasting the correct direction of prices depends on the deep study of the market. Usually, we use three analytical Market types:
News analysis,
Technical analysis,
Psychological analysis
The thoughtful and proper combination of these three analyses is the guarantee for predicting the correct forex market directions.
News Analysis
This includes Economic, and political factors study, which might affect the currency market. For example, American Central Reserve Bank policies reports, economy transactions, the pronouncements and other important events. The goal of the analysis is to study the key factors and their impacts on the dynamics of prices in the forex market. The trader in the forex market always must be familiar with the current global situation.
Technical analysis
This is meaning the study of the market situation changes based on the previous prices. We Use in this analysis charts, which reflect price changes for a certain period of time. We also understand the general market situation at the present time; several indicators can predict price changes in the near future. The technical analysis based on the fact that the previous prices take all the factors that could affect the market - economic, political, psychological and other factors –, and the behavior of prices is the result of these decisions. The technical analysis gives a wealth of tools enable us to draw useful forecasts graphics for the prices. What is needed is the fact that the trader must know the price trend, I will show you later how you can know all directions of price only by use trend lines.
Psychoanalysis
Its mean Analyzing traders behaviors in the market, their psychological, expectations, hopes and fears. This kind of analysis is very important because it gives very high proportion of truth. We must not forget that behind the computer stations that give prices, humans and currencies prices depends on there behavior ultimately.
Thursday, June 21, 2007
Monday, June 18, 2007
General guidance before start
(1) In currency market (Forex) you can make fabled profits which is very difficult to be achieved in any other area, it is at the same time holds much risk ... Without exaggeration, you can double your top owner in only one week, and it is very possible to lose the entire top owner in one week too. The only way to reduce the risk ratio is learning how to trade correctly in addition to learning the art of risk management or account management.
(2) The currency market requires a considerable effort to learn and follow and practice especially in the early stages, and it needs a long time to spend on the screen of the computer to follow the market and the latest news, so before starting make sure that your personal circumstances fit this market before entering it.
(3) one of characteristics of the currency market is that it gives you an experimental fictional account (Demo), This demo account is quite similar to the real account, only the amount of deliberation in the demo is an imaginary Hypothetical given by the company for you to be able to train until that you become Capable to trade real money.
(4) Also one of advantages of the forex is that it provides an opportunity for almost everyone to enter it; you need only an amount of $ 300 just to enter this market. The reason behind that is that you deal in margin system which allows you to double the capital originally deposited, by giving you the opportunity to big profits, or loss.
(5) forex market needs patience and wait in the beginning stage, you have to learn and practice what you learn in demo, and it is recommended that you train not less than six months of real trainings, The biggest problem facing the junior is hurrying to open a real account without real access to the required knowledge and expertise ... We have seen dozens of people who are rushing to seek profits without adequate training, which resulted in heavy casualties.
(6) Dealing with international mediators provide you trading currencies service, this dealing is directly via the Internet, we will detail this point later under the title (selection mediator dealing with).
(7) Psychological factor plays a large role in the mastery of this type of trading, Greed is one of the greatest enemies in this market, greed and dream of rapid winning, cause a hasty transfer of funds and starting trading in a desire to reap quick profits, but the dream quickly turns to the disturbing fact the large losses. The learning, practice and patience make scientific deliberation process easy and accessible.
(8) I recommend you not to put achieving profits as your first goal in the beginning, but your goal is only to make learning the proper way of handling, and do not make your abundant dreams of winning lead you ... If you achieved your goal in reaching the proper trading ... Only then Static profits and dreams will be realized .
(2) The currency market requires a considerable effort to learn and follow and practice especially in the early stages, and it needs a long time to spend on the screen of the computer to follow the market and the latest news, so before starting make sure that your personal circumstances fit this market before entering it.
(3) one of characteristics of the currency market is that it gives you an experimental fictional account (Demo), This demo account is quite similar to the real account, only the amount of deliberation in the demo is an imaginary Hypothetical given by the company for you to be able to train until that you become Capable to trade real money.
(4) Also one of advantages of the forex is that it provides an opportunity for almost everyone to enter it; you need only an amount of $ 300 just to enter this market. The reason behind that is that you deal in margin system which allows you to double the capital originally deposited, by giving you the opportunity to big profits, or loss.
(5) forex market needs patience and wait in the beginning stage, you have to learn and practice what you learn in demo, and it is recommended that you train not less than six months of real trainings, The biggest problem facing the junior is hurrying to open a real account without real access to the required knowledge and expertise ... We have seen dozens of people who are rushing to seek profits without adequate training, which resulted in heavy casualties.
(6) Dealing with international mediators provide you trading currencies service, this dealing is directly via the Internet, we will detail this point later under the title (selection mediator dealing with).
(7) Psychological factor plays a large role in the mastery of this type of trading, Greed is one of the greatest enemies in this market, greed and dream of rapid winning, cause a hasty transfer of funds and starting trading in a desire to reap quick profits, but the dream quickly turns to the disturbing fact the large losses. The learning, practice and patience make scientific deliberation process easy and accessible.
(8) I recommend you not to put achieving profits as your first goal in the beginning, but your goal is only to make learning the proper way of handling, and do not make your abundant dreams of winning lead you ... If you achieved your goal in reaching the proper trading ... Only then Static profits and dreams will be realized .
Thursday, June 14, 2007
What is Margin ?
Margin based on the idea of borrowing, but borrowing differs from the margin system in terms of procedures and quality guarantees required to provide such facilities, For example, in the normal borrowing when you want to borrow $ 100.000, requires you to provide mortgage guarantees, and such actions almost normal because the bank does not have the ability to control the risk of collecting the amount borrowed. While in margin system does not require more than $ 1000 for example, to obtain credit facilities amounting to $ 100.000, in the presence of a regime governing the collection of the loan, and the idea that the deposit with the bank accounted for 1% of the loan value in the case of loss the bank collected deposit amount, here there is no problem with the bank that borrowing you to 400 times the amount deposited, because the loan has come to resemble Free of risk for the bank. But in the capital market the borrowing process differs through term called Contract or Lot, which is used as a measurement standard means the quantity of money, this contract contains money available to borrow, so you must borrowed an amount equivalent insurance, and in the event of loss, the money will discount from your 1000$.
Tuesday, June 12, 2007
what is forex?
FOREX, or Foreign Exchange, is buying and selling of currencies. The US dollar is almost always the base currency against which other currencies are bought and sold. also referred to, as “FX” is open to corporations, small businesses, commercial banks, investment funds and private individuals
As far as the freedom from any external control and free competition are concerned, FOREX is a perfect market. FOREX is a more objective market, because if some of its participants would like to change prices, for some manipulative purpose, they would have to operate with tens of billions dollars. That is why any influence by a single participants in the market is practically out of the question. The superior liquidity allows the traders to open and/or close positions within a few seconds.
However, Forex is not a market in a traditional sense. It doesn't have a fixed location of the trading floor as, for example, futures market does. The trading is done over the telephone and at the computer terminals in hundreds of banks around the world simultaneously
The most commonly traded currencies are referred to as “Majors”; over 85% of daily transactions on Forex trading involve the Majors. These seven currencies are the US Currency (Dollar, USD), Japanese Yen (JPY), Euro (EUR), British Pound (GBP), Swiss Franc (CHF), Canadian Dollar (CAD) and Australian Dollar (AUD).
The time of keeping a position is arbitrary and has no limits: from several seconds to many years. It depends only on your trading strategies. Although the daily fluctuations of currencies are rather insignificant, you may use the credit lines, that are accessible even to currency speculators with small capitals ($ 1,000 - 5,000), where the profit may be impressive.
Forex is open 24 hours a day, and the currency exchange operations are maintained throught working days of the week. Almost every time zone (London, New York, Tokyo, Hong Kong, Sydney) has dealers willing to quote currencies
This market surpasses the others in its volume. For example, the daily turnover of world securities market is estimated at $300 billion, while Forex approaches 1 to 3 TRILLION US dollars in the same amount of time
As far as the freedom from any external control and free competition are concerned, FOREX is a perfect market. FOREX is a more objective market, because if some of its participants would like to change prices, for some manipulative purpose, they would have to operate with tens of billions dollars. That is why any influence by a single participants in the market is practically out of the question. The superior liquidity allows the traders to open and/or close positions within a few seconds.
However, Forex is not a market in a traditional sense. It doesn't have a fixed location of the trading floor as, for example, futures market does. The trading is done over the telephone and at the computer terminals in hundreds of banks around the world simultaneously
The most commonly traded currencies are referred to as “Majors”; over 85% of daily transactions on Forex trading involve the Majors. These seven currencies are the US Currency (Dollar, USD), Japanese Yen (JPY), Euro (EUR), British Pound (GBP), Swiss Franc (CHF), Canadian Dollar (CAD) and Australian Dollar (AUD).
The time of keeping a position is arbitrary and has no limits: from several seconds to many years. It depends only on your trading strategies. Although the daily fluctuations of currencies are rather insignificant, you may use the credit lines, that are accessible even to currency speculators with small capitals ($ 1,000 - 5,000), where the profit may be impressive.
Forex is open 24 hours a day, and the currency exchange operations are maintained throught working days of the week. Almost every time zone (London, New York, Tokyo, Hong Kong, Sydney) has dealers willing to quote currencies
This market surpasses the others in its volume. For example, the daily turnover of world securities market is estimated at $300 billion, while Forex approaches 1 to 3 TRILLION US dollars in the same amount of time
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