Black Mold
The Foreign Exchange is the largest financial market in the world, with trillions of dollars traded each and every day. Initially utilized just by large banks, multinational corporations and extremely wealthy currency speculators, the influx of online brokerages tailored to the retail market has created a vibrant retail foreign exchange market! Now, with a relatively small initial investment, anyone with an internet connection can take advantage of the online Forex market.
While banks and large multinational corporations generally execute foreign exchange transactions simply as a function of doing international business or to hedge their base currency to protect against devaluation, currency speculators exploit fluctuations in the foreign exchange market exclusively for profit. While trading currencies is a bit riskier than trading other instruments, like stocks and commodities, the potential for profit is unparalleled. For example George Soros, perhaps the most successful Forex trader, made $1 billion in a single day when he sold the pound against the dollar in 1992.
The major currencies traded on the foreign exchange are the US dollar, the Eurodollar, the Japanese Yen, the Swiss Franc, and the British Pound. These different currencies are expressed as pairs. When these pairs are traded, one of the currencies is bought and the other currency is sold concurrently. Today, anyone with an internet connection can trade these pairs under the same conditions once reserved for high value individuals and corporations. Most retail brokerages offer real time currency prices, instant execution, advanced charting features and extensive real time news and analysis feeds.
If you are interested in trying out the foreign exchange, we have assembled a list of quality brokerages that offer free “fake money” accounts where one may trade in real market conditions. Not only is their immense profit potential in the Foreign Exchange market, it is quite exhilarating as well. Why not give it a shot?
Black Mold
Tuesday, December 4, 2007
History of the Foreign Exchange
Until the mid-seventies, major industrial economies were governed by the Bretton Woods agreement of 1944. The Bretton Woods agreement—which was named after the location of the international conference establishing this new monetary order—obliged participating international economies to peg their currencies to the dollar, which itself remained within a 1% standard deviation from the prevailing gold rate.
The architects of the Bretton Woods agreement hoped to prevent countries from artificially devaluating currencies, in order to make goods more attractive in the international marketplace, which led, in part, to a disastrous shrinking of the world economy in the 30s.
The system they established lasted for the next three decades. Shrinking confidence in the dollar, however, lead to a new international monetary system of floating rates, meaning that regular market forces, rather than governmental intervention, would determine the value of currencies. It was from this new system that the modern Forex market arose.
In a floating exchange rate system, market demand determines the relative value of currencies. Such a system is thought of as self-correcting, as any inefficiency is hammered out in the market. If, for instance, global demand for a particular currency falls, goods will become cheaper, and thus the value will begin to rise with the newly created demand.
In a floating exchange system, traders can exploit inefficiencies before the market corrects itself. These traders are called arbitrageurs, and they are able to utilize online brokers to execute their trades. If you are interested in beginning to trade in the Foreign Exchange, please visit our broker’s page to find a broker suitable for you.
The architects of the Bretton Woods agreement hoped to prevent countries from artificially devaluating currencies, in order to make goods more attractive in the international marketplace, which led, in part, to a disastrous shrinking of the world economy in the 30s.
The system they established lasted for the next three decades. Shrinking confidence in the dollar, however, lead to a new international monetary system of floating rates, meaning that regular market forces, rather than governmental intervention, would determine the value of currencies. It was from this new system that the modern Forex market arose.
In a floating exchange rate system, market demand determines the relative value of currencies. Such a system is thought of as self-correcting, as any inefficiency is hammered out in the market. If, for instance, global demand for a particular currency falls, goods will become cheaper, and thus the value will begin to rise with the newly created demand.
In a floating exchange system, traders can exploit inefficiencies before the market corrects itself. These traders are called arbitrageurs, and they are able to utilize online brokers to execute their trades. If you are interested in beginning to trade in the Foreign Exchange, please visit our broker’s page to find a broker suitable for you.
Forex Scalping
Forex scalping is a trading strategy in which the trader makes dozens or even hundreds of trades daily, looking to capture a few pips per trade. Generally, scalpers stay in trades for less than a minute, bolting as soon as their position captures a few pips.
Brokers do not look kindly upon scalpers, as many times scalpers will exit a position before the dealing desk has time to deal your order. This means that the brokerage has to eat the position—a successful scalper will consistently earn money—money that comes directly from the brokerage’s pocket.
To avoid this conflict of interest between scalpers and the brokerages, scalpers often trade with electronic communication network (ECN) brokerages, which circumvent the dealing desk allowing online traders to trade directly with one another. ECN brokerages usually have less liquidity than traditional dealing desk brokerages and charge a per trade commission, but their pip spreads are narrower.
To be a successful online Forex scalper, traders must follow strict risk management rules. Because the scalper grabs only a couple of pips at a time, one big loss can wipe out dozens and dozens of careful, meticulous trading. Traders should be sure to use stop loss orders, ensuring that the profit/loss margin on each trade is very small.
Brokers do not look kindly upon scalpers, as many times scalpers will exit a position before the dealing desk has time to deal your order. This means that the brokerage has to eat the position—a successful scalper will consistently earn money—money that comes directly from the brokerage’s pocket.
To avoid this conflict of interest between scalpers and the brokerages, scalpers often trade with electronic communication network (ECN) brokerages, which circumvent the dealing desk allowing online traders to trade directly with one another. ECN brokerages usually have less liquidity than traditional dealing desk brokerages and charge a per trade commission, but their pip spreads are narrower.
To be a successful online Forex scalper, traders must follow strict risk management rules. Because the scalper grabs only a couple of pips at a time, one big loss can wipe out dozens and dozens of careful, meticulous trading. Traders should be sure to use stop loss orders, ensuring that the profit/loss margin on each trade is very small.
Carry Trading
The carry trade is a popular online Forex strategy which takes advantage of the different interest rates between two currencies. If one currency has a relatively low interest rate it can be sold against a currency with a high interest rate and the trader may pocket the interest rate differential. Speculators are guaranteed rollover interest deposits in their account at the end of each trading day. This can provide a significant boost to trader’s profit. If, for instance, an investor buys the NZD against the JPY, which have interest rates of 7.25 and .25 respectively, the trader can make a profit of 7% provided the market doesn’t move.
However, even when exploiting interest rate differentials, there are still significant risks to a trader. Obviously, the market can still move against the trader’s position, though the rollover interest adjustments do help mitigate potential losses. Considering that most carryover traders use exceptionally high leverages to exploit interest rate differentials, even a small move against a position can lead to very high losses.
However, even when exploiting interest rate differentials, there are still significant risks to a trader. Obviously, the market can still move against the trader’s position, though the rollover interest adjustments do help mitigate potential losses. Considering that most carryover traders use exceptionally high leverages to exploit interest rate differentials, even a small move against a position can lead to very high losses.
How do I get started in Forex?
Do you see the profit potential in trading currencies, but learning to trade just seems too daunting? Have you watched with excitement the recent crashing of the value of the USD, but simply don’t know how to get started trading?
While it is simple to begin trading Forex online, maintaining profitability in the long term is no easy task. You have probably heard that 90% of Forex traders lose their money in the long term. If indeed this is true, it is the result of a couple of different factors.
Overtrading: Each trade costs you a couple of pips—Consider your trades well before you make them. Each faulty trade, even if exited quickly, drains equity.
Bad money management: One bad trade can wipe out a year of patient, smart trading. Manage your risk using stop loss orders, so that you never risk too high a percentage of your equity on any one single trade.
Lack of knowledge: If you have never traded Forex before, educate yourself! Successful traders are not born that way. The difference between success and failure in the Forex market depends in no small part on the knowledge and education of a trader. For the beginning trader, a proper education is essential before investing in the Foreign Exchange. Find a program you are comfortable with, and begin practicing on a demo account.
Trading on the foreign exchange offers unparalleled opportunities for profit, but it is also extremely risky. Make sure you know what you are getting into before you start trading, and start trading only when you are comfortable in your knowledge and ability.
While it is simple to begin trading Forex online, maintaining profitability in the long term is no easy task. You have probably heard that 90% of Forex traders lose their money in the long term. If indeed this is true, it is the result of a couple of different factors.
Overtrading: Each trade costs you a couple of pips—Consider your trades well before you make them. Each faulty trade, even if exited quickly, drains equity.
Bad money management: One bad trade can wipe out a year of patient, smart trading. Manage your risk using stop loss orders, so that you never risk too high a percentage of your equity on any one single trade.
Lack of knowledge: If you have never traded Forex before, educate yourself! Successful traders are not born that way. The difference between success and failure in the Forex market depends in no small part on the knowledge and education of a trader. For the beginning trader, a proper education is essential before investing in the Foreign Exchange. Find a program you are comfortable with, and begin practicing on a demo account.
Trading on the foreign exchange offers unparalleled opportunities for profit, but it is also extremely risky. Make sure you know what you are getting into before you start trading, and start trading only when you are comfortable in your knowledge and ability.
OWWA exec rules out special $ rate for OFWs
ranking official of the Overseas Workers Welfare Administration (OWWA) on Tuesday ruled out the possibility of having a special foreign exchange rate for overseas Filipino workers (OFWs) affected by the strengthening of the peso.
Deputy Administrator Noreil Devanadera instead proposed that families of OFWs be taught on how to better manage the dollar remittances they receive from abroad.
“I think the families should instead be educated in having a change in their lifestyles. The OFW families should learn how to be wise in their expenditures and practice better management of their earnings," Devanadera told reporters during a press briefing at the OWWA reintegration center in Intramuros, Manila.
Devanadera, at the same time, noted there are some sectors of the OFWs who are not affected by the peso appreciation.
“The foreign exchange will not affect the entire OFWs. There are only certain groups that are affected. These are the domestic helpers and laborers, who are in the $200 (monthly salary) bracket. But those who are earning euros are not affected by the strengthening of the peso," Devanadera said.
Earlier, the Bangko Sentral has turned down proposals to fix the peso-dollar exchange rate at P50:$1 for OFWs in order to preserve the purchasing power of the OFW remittances.
Devanadera said the Department of Labor and Employment (DoLE) is looking at some measures to cushion the impact of the depreciation of the dollar.
Among the possible assistance the government could extend to the OFWs is financial assistance and skills training to the OFW families who are affected by the rising peso value.
“Hindi ako pabor diyan dahil dapat walang special treatment [ang OFWs]. Kasi maski malaki ang dollar, pag hindi ginastos wisely wala lang din effect sa OFW family [ang fixed rate]," said Corazon Atuel, wife of veteran seafarer Eugenio Atuel.
Deputy Administrator Noreil Devanadera instead proposed that families of OFWs be taught on how to better manage the dollar remittances they receive from abroad.
“I think the families should instead be educated in having a change in their lifestyles. The OFW families should learn how to be wise in their expenditures and practice better management of their earnings," Devanadera told reporters during a press briefing at the OWWA reintegration center in Intramuros, Manila.
Devanadera, at the same time, noted there are some sectors of the OFWs who are not affected by the peso appreciation.
“The foreign exchange will not affect the entire OFWs. There are only certain groups that are affected. These are the domestic helpers and laborers, who are in the $200 (monthly salary) bracket. But those who are earning euros are not affected by the strengthening of the peso," Devanadera said.
Earlier, the Bangko Sentral has turned down proposals to fix the peso-dollar exchange rate at P50:$1 for OFWs in order to preserve the purchasing power of the OFW remittances.
Devanadera said the Department of Labor and Employment (DoLE) is looking at some measures to cushion the impact of the depreciation of the dollar.
Among the possible assistance the government could extend to the OFWs is financial assistance and skills training to the OFW families who are affected by the rising peso value.
“Hindi ako pabor diyan dahil dapat walang special treatment [ang OFWs]. Kasi maski malaki ang dollar, pag hindi ginastos wisely wala lang din effect sa OFW family [ang fixed rate]," said Corazon Atuel, wife of veteran seafarer Eugenio Atuel.
Recommended External Links
Business Web Directory
Online Business Directory
Bourse et analyse technique
French technical analysis and trading page
e-Forex
International magazine devoted to online FX trading
The Stock Advisors
An interactive guide to financial newsletters
Trading Psychology
Dr Brett Steenbarger's website on trading psychology
DayTradingTheMarkets.com
The online community for day traders of stocks, options, futures, and forex.
Day Trading
The largest selection of FREE day trading articles in the world.
DailyFX forum
Online Business Directory
Bourse et analyse technique
French technical analysis and trading page
e-Forex
International magazine devoted to online FX trading
The Stock Advisors
An interactive guide to financial newsletters
Trading Psychology
Dr Brett Steenbarger's website on trading psychology
DayTradingTheMarkets.com
The online community for day traders of stocks, options, futures, and forex.
Day Trading
The largest selection of FREE day trading articles in the world.
DailyFX forum
Add Forex Currency News On Your Site
Due to popular demand I have made an easy way for all of you to add my forex commentary to your sites.
Below you will see different possible layouts you can use. Underneath each layout is a box with the html code you will have to include on your site to use that layout.
When you find the layout you like simply click on the "Highlight Text" button under the html box to select all the html. Then press ctrl-c to copy it and go to the html editor of your site and paste it wherever you want it.
If you would like to see it in other colors or format on your site let me know and I will do my best to help work it out
Below you will see different possible layouts you can use. Underneath each layout is a box with the html code you will have to include on your site to use that layout.
When you find the layout you like simply click on the "Highlight Text" button under the html box to select all the html. Then press ctrl-c to copy it and go to the html editor of your site and paste it wherever you want it.
If you would like to see it in other colors or format on your site let me know and I will do my best to help work it out
Monday, December 3, 2007
Free Forex Charts
I am always on the lookout to enhance my site with things that can benefit forex traders. So I am providing free forex charts on my site. You can select your choice of currency pair from the "instruments" pulldown menu, draw trendlines, add moving average and bollinger bands to the chart, and see the price movements real-time.
I hope this helps all of you traders and readers (especially when you want to see how a currency pair moves while you are working at your day job and have no access to your charting software), and if you like it, please tell your friends about it so that they can enjoy this free tool as well. Enjoy charting!
I hope this helps all of you traders and readers (especially when you want to see how a currency pair moves while you are working at your day job and have no access to your charting software), and if you like it, please tell your friends about it so that they can enjoy this free tool as well. Enjoy charting!
Choosing a Forex Broker
Choosing a good Forex broker can be as complicated as Forex trading itself. For that reason, investors should do their homework as diligently as they would for a trade. Here are some tips to keep in mind to make your research and choice easier.
In the U.S., any worthwhile Forex broker will be registered as a Futures Commercial Merchant (FCM) with the CFTC (Commodities Futures Trading Commission). Finding one doesn’t end the need for research, it’s just the bare minimum you should require.
Since Forex trades are highly leveraged (in effect, the broker ‘lends’ an investor up to 99% of the money required to make a trade), the broker you select should be associated with a firm with deep pockets.
Forex accounts are not FDIC (Federal Deposit Insurance Corporation) insured, so you can not expect the U.S. government, or anyone else, to bail out the brokerage firm or reimburse you if the market turns sharply downward. Large institutions, with ample capital to withstand downturns in the market, and rapid drains on their deposits if clients withdraw en masse, are crucial to your financial peace of mind.
Beyond those rock bottom basics there are many options.
Since the Forex markets trade 24 hours per day all around the world, you may want to trade after normal business hours in your home country. Whether your broker resides in the same country (usually, for language and legal reasons) or not, you want one who will pick up the phone when you call.
Forex trading has moved into the Internet age, but it is still very much a phone-based business. Getting a broker on the phone at any time of the day or night can mean the difference between profit and loss. Sometimes, big profit or loss.
Since Forex brokers don’t work off standard commissions the way stock or bond brokers do, you need to research the firm’s spreads. Forex trading is always done in currency pairs. A spread is the difference between the bid and ask price - what the broker pays to buy versus the amount they sell a currency for.
Some brokers will offer fixed spreads on all trades, which has the advantage of predictability. It’s a kind of fixed ‘commission’. But that may or may not suit your trading style or your budget, since they tend to be larger than variable spreads.
Any broker will offer a standard account to a qualified client. Typically you have to fill out an application form that states you have adequate capital and understand the risks involved in Forex trading. Standard accounts trade currency in standard lots of 100,000 units. You can’t buy 100 euros for $150, you have to buy 100,000 euros.
Since that’s a very large investment for the average trader, brokers offer leverage. Professional traders use leverage as well, of course. In other words you put in, say 1% of the total, the broker puts up the rest. That has huge profit (or loss) potential, but it entails significant risk. So be aware of a broker’s margin call policy.
Many brokers today will offer some form of ‘mini’ account. Instead of trading in standard lots, they trade in smaller units, such as 10,000. This lowers the investment required from, say $2,500 to only $250. Most clients can easily meet that minimum.
But that lower leverage requirement limits the potential for profits. That may or may not suit your investment needs. Only you can decide.
You’ll want a broker with software that provides you with the research and other trading tools you will need to be effective in Forex trading. Forex investing is much more complex and volatile than even stock or bond trading, which is already not simple when done well.
Be sure to use the trial accounts offered and make several ‘fake’ trades in order to test out the software and research available. You need real-time prices - Forex moves very fast - and lots of technical and fundamental analysis information at your fingertips.
There are websites and forums where specific brokers are discussed, but take what’s said there with a grain of salt. Just as with complaints about vendors on eBay or Amazon and other large Internet trading arenas, a few bad remarks shouldn’t ruin the reputation of honorable brokers.
In the U.S., any worthwhile Forex broker will be registered as a Futures Commercial Merchant (FCM) with the CFTC (Commodities Futures Trading Commission). Finding one doesn’t end the need for research, it’s just the bare minimum you should require.
Since Forex trades are highly leveraged (in effect, the broker ‘lends’ an investor up to 99% of the money required to make a trade), the broker you select should be associated with a firm with deep pockets.
Forex accounts are not FDIC (Federal Deposit Insurance Corporation) insured, so you can not expect the U.S. government, or anyone else, to bail out the brokerage firm or reimburse you if the market turns sharply downward. Large institutions, with ample capital to withstand downturns in the market, and rapid drains on their deposits if clients withdraw en masse, are crucial to your financial peace of mind.
Beyond those rock bottom basics there are many options.
Since the Forex markets trade 24 hours per day all around the world, you may want to trade after normal business hours in your home country. Whether your broker resides in the same country (usually, for language and legal reasons) or not, you want one who will pick up the phone when you call.
Forex trading has moved into the Internet age, but it is still very much a phone-based business. Getting a broker on the phone at any time of the day or night can mean the difference between profit and loss. Sometimes, big profit or loss.
Since Forex brokers don’t work off standard commissions the way stock or bond brokers do, you need to research the firm’s spreads. Forex trading is always done in currency pairs. A spread is the difference between the bid and ask price - what the broker pays to buy versus the amount they sell a currency for.
Some brokers will offer fixed spreads on all trades, which has the advantage of predictability. It’s a kind of fixed ‘commission’. But that may or may not suit your trading style or your budget, since they tend to be larger than variable spreads.
Any broker will offer a standard account to a qualified client. Typically you have to fill out an application form that states you have adequate capital and understand the risks involved in Forex trading. Standard accounts trade currency in standard lots of 100,000 units. You can’t buy 100 euros for $150, you have to buy 100,000 euros.
Since that’s a very large investment for the average trader, brokers offer leverage. Professional traders use leverage as well, of course. In other words you put in, say 1% of the total, the broker puts up the rest. That has huge profit (or loss) potential, but it entails significant risk. So be aware of a broker’s margin call policy.
Many brokers today will offer some form of ‘mini’ account. Instead of trading in standard lots, they trade in smaller units, such as 10,000. This lowers the investment required from, say $2,500 to only $250. Most clients can easily meet that minimum.
But that lower leverage requirement limits the potential for profits. That may or may not suit your investment needs. Only you can decide.
You’ll want a broker with software that provides you with the research and other trading tools you will need to be effective in Forex trading. Forex investing is much more complex and volatile than even stock or bond trading, which is already not simple when done well.
Be sure to use the trial accounts offered and make several ‘fake’ trades in order to test out the software and research available. You need real-time prices - Forex moves very fast - and lots of technical and fundamental analysis information at your fingertips.
There are websites and forums where specific brokers are discussed, but take what’s said there with a grain of salt. Just as with complaints about vendors on eBay or Amazon and other large Internet trading arenas, a few bad remarks shouldn’t ruin the reputation of honorable brokers.
Trading Strategy Tester for FOREX
Trading Strategy Tester for FOREX 1.88 is investment tools software developed by PC-Safety.
Trading Strategy Tester for FOREX is a software simulator of Foreign Exchange Market - FOREX. It is an excellent instrument for studying trading in a fast and convenient way, to gain and improve trading skills without risking real money. Saving your time, taking away the necessity to wait hours and even days in real-time conditions for situation to turn out, it will open your eyes on market behaviour.
This program is shareware, which means you can download and use Trading Strategy Tester for FOREX 1.88 for free during 30-days trial period. After this period you gonna have to buy Trading Strategy Tester for FOREX 1.88 software for $99.00 or uninstall the program. Trading Strategy Tester for FOREX 1.88 supports English interface languages and works with Windows 98/XP/Vista.
Latest Trading Strategy Tester for FOREX 1.88 does not contain any spyware and/or advertise modules, allowing installing it with no worries concerning valuable information loss
Trading Strategy Tester for FOREX is a software simulator of Foreign Exchange Market - FOREX. It is an excellent instrument for studying trading in a fast and convenient way, to gain and improve trading skills without risking real money. Saving your time, taking away the necessity to wait hours and even days in real-time conditions for situation to turn out, it will open your eyes on market behaviour.
This program is shareware, which means you can download and use Trading Strategy Tester for FOREX 1.88 for free during 30-days trial period. After this period you gonna have to buy Trading Strategy Tester for FOREX 1.88 software for $99.00 or uninstall the program. Trading Strategy Tester for FOREX 1.88 supports English interface languages and works with Windows 98/XP/Vista.
Latest Trading Strategy Tester for FOREX 1.88 does not contain any spyware and/or advertise modules, allowing installing it with no worries concerning valuable information loss
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