A Few Facts Worth Knowing About Forex Currency Pairs
May 15, 2009 | Leave a Comment
The bare fact is that in order to trade in forex currencies requires trading in pairs of currencies such as EUR/USD in which the Euro trades over the US dollar and this is a typical form of forex currency pairs. In the case of EUR/USD, the Euro which is the first currency is known as the base currency while the second currency or the US dollar is known as the quote currency or counter. What it means is that in the case of these forex currency pairs, if you wish to buy the currency pair, you have to buy the Euro and sell the US dollar simultaneously.
Complete Understanding
Thus, to succeed with trading in forex currency pairs, you need to have a complete understanding of currency pairs and in particular when making a Forex transaction, know for sure what currency you will be buying or selling. In order to succeed with forex currency pairs, it requires having thorough knowledge about the major currencies of the world such as the US dollar, GB pound, German deutsche mark and so on.
For long, the US dollar was the major currency in world trade and it was used to evaluate other currencies being traded on Forex and so all currencies had to be quoted in terms of the US dollar. Since all Forex trading deals with foreign currencies and the extent of such trade is stupendous and amounts to well over a trillion dollars, to succeed at it requires understanding forex currency pairs.
As explained, traders buy as well as sell currencies through exchanging one form of money for a second type of currency and hope to realize a profit from doing so. The market quotations as far as Forex is concerned will specify forex currency pairs which is shown as a base currency followed by the quote currency and among the most common forex currency pairs are EUR/USD (euro vs. US dollar) GBP/USD (British pound vs. US dollar), USD/JPY (US dollar vs. Japanese Yen) and USD/CHF or US dollar vs. Swiss franc.
As far as forex currency pairs go, it is usual to have the Forex quotation state the base or domestic currency first which is followed by the counter or quote currency. Furthermore, the base currency is always a single monetary unit such as 1 USD or 1 EUR or 1 GBP, and is implied and not necessarily shown. Lastly, forex currency pairs normally depict the ‘bid’ and ‘ask’ price and the former refers to the price that brokers wish to pay while the latter means a price at which the broker wants to sell the currency.
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The Advantage Of Spot Forex
November 13, 2008 | Leave a Comment
Most of the world thinks of a spot as a mark that can be found marring a wall, or discoloring a freshly washed glass, or permanently soaked into a prom dress. Most of the world thinks of a spot as an undesirable thing. The word spot takes on a whole new meaning in the world of the Foreign Exchange Market, also known as the Forex. The movers and shakers involved with a Forex know that a spot is a wonderful thing.
What Is A Spot?
The typical Forex transaction is typically a futures contract. A spot Forex transaction is a cash transaction. The best part of a Spot Forex exchange is that it happens extremely quickly. A spot Forex transaction takes place within two days, compared to the typical Forex transaction more often then not drags on for three long months. The reason a Spot Forex trade takes two days instead of one, is because it typically takes forty-eight hours to transfer the funds from one bank to another. When dealing with a spot Forex transaction the goods must be immediately available for delivery as soon as the seller has the cash in their hand.
Spot Market
Commodities and/or securities are immediately sold for cash is called a spot market. When dealing with a spot market, brokers must bear in mind that both the funds and the commodities must be available immediately.
Why Brokers Turned To Spot
It wasn’t that long ago that a majority of the Forex brokers did a majority of their buying and selling in currency. That is changing. Today the same Forex brokers are turning their backs on the old currency in favor of spot Forex. The reason the brokers have changed their ways is convenience. Spot Forex makes it easier for brokers to liquidate their stocks. Spot Forex is also a little more cost efficient then the currency market was. Brokers cannot deny the appeal of knowing that the banks are on stand-by twenty-four hours, seven days a week, ready with quotes. Brokers who are dealing with spot Forex are not required to pay membership fees to the National Futures Association (NFA). Spot Forex eliminates the need to figure out the exchange rate when the seller and buyer are in two separate countries.
Brokers who are accustomed to dealing in currency will be thrilled to find that they have no problem adapting to spot Forex, the technical details of the two markets are very similar.
Learn more how you can make money from Forex Trading Here!
What The Heck Is “Inversion Forex Videos”?
October 28, 2008 | Leave a Comment
Inversion Forex Videos is a professional blog aimed at Spanish-speaking forex traders, although there are the occasional bits in English floating about. Although Inversion Forex Videos ends with an “s”, since it refers to only one blog, it’s referred to as a singular noun. That is why some of the noun verb agreements (like “I said, he says…”) are going to look a little jarring.
Google Page Rank
If you enter “inversion forex” into the search engine Emperor, Google, you will get pages and pages of links in Spanish, mostly connecting in one way or another to the Inversion Forex Videos blog. In 2006, Nielsen (the same company that determines television ratings) claims that almost 50% of online searches are done on Google.
So, quite frankly, there isn’t that much of an incentive to go look on other search engines for “inversion forex” for anything comprehensible in English on any other search engine. However, Google’s method of determining page ranking placements is based on a combination of at least one hundred algorithms, of which 10 changes weekly. SO, perhaps next week Inversion Forex News will drop a few pages down.
Blog Review
Inversion Forex Videos is claimed to be put together by the mysterious “forex4x”, but most likely is a synthesis of RSS feeds and “robots” that are to select videos with the words “inversion” and “forex” in there somewhere. This means that often the videos presented have nothing to do with forex (the buying and selling of foreign currencies).
You do get videos on chiropractic inversion tables, a guitarist who uses and inversion method of playing, a video from an Asian pop group, and a scolding of Cuba about its “moral inversion” from Human Rights Watch. There are also videos about forex, but they are all in Spanish.
As to what this blog is supposed to be about – well, your guess is as good as mine. The advertisements aren’t even much of a clue, as they range from “Seven Days To Profitable Blogging” to “Best Yeast Infection Treatments.” The archives are arranged in the generally considered date archive format, which are of no help to forex traders or to freelance writers trying to write an article on inversion forex.
The closest thing to forex information on the blog is a “Forex Quick Facts” widget, which changes one sentence every time you refresh the page. If you want to learn about forex, you’re best off skipping Inversion Forex Videos and going elsewhere. Perhaps “forex4x” needs to read “Seven Days To Profitable Blogging”.
Learn more how you can make money from Forex Trading Here!
Why You Should Use Regulated Forex Brokers
October 12, 2008 | Leave a Comment
Are you interested in a career as a regulated Forex broker? Forex brokers work in the exciting world of foreign currency, making millions for their customers. They also earn plenty of money in commissions for themselves, betting on which countries’ exchange rates are going to rise and fall in the future.
Who Regulates Forex Brokers?
Because Forex brokers work around the world in different cities and countries, no single agency regulates all Forex brokers. Rather, brokers are regulated by the local brokerage regulation agency in their home countries. Thus, U.S. Forex brokers are regulated by the Securities and Exchange Commission, the Federal Reserve System, the Federal Deposit Insurance Corporation, or the Office of the Comptroller of the Currency.
Forex brokers in Japan are regulated by the Financial Services Agency, while the Iraq Securities Commission regulates Forex brokers in Iraq.
What Rules Cover Forex Traders?
Trading on foreign exchanges is quite different than trading on Nasdaq or the NYSE. The National Futures Association makes rules for Forex trading. Most of the trades involve the major currencies: The American, Canadian, and Australian Dollars; The British Pound; the Euro; the Japanese Yen, and so forth.
National Futures Association
These regulations are set forth in the National Futures Association Retail Off Exchange Foreign Currency Rules. The Rules include information about dues and assessments, requirements for managing a Forex account, obligations of assignees, and a number of other situations that arise during the course of Forex trading.
The web site of the National Futures Association contains a wealth of information for the beginning regulated Forex broker or Forex investor. There you will find all the rules that govern Forex traders; Forex investor alerts; Forex reporting requirements; notices to Forex members, notices of decisions interpreting the Forex rules, and other resources for those who want to know more about Forex.
The site also provides links for electronic filings required to establish and maintain a Forex brokerage: promotional materials, Forex reporting, exemptions, complaints, and the annual questionnaire.
Beware Of Unregulated Brokers
Investors must be aware that Forex fraud is an increasingly pervasive problem. The Commodity Futures Trading Commission estimates that customers have lost over $395 million in fraudulent Forex schemes.
For More Information
If you want even more information about Forex than is found on the National Futures Association site, you can learn Forex trading by a self study program or by taking a course. Peter Bain at Forex Mentor provides one of the top rated Forex training programs around today.
