Is It Really Possible To Profitably Trade Forex From Home And Earn A Part-Time, Or Even Full-Time, Income?

The Answer Is YES...

And If You, Along With A Growing Number Of People, Want To Trade The 24-Hour Foreign Currency Market Without Fear Or Stress, But Comfortably And Methodically, We Can Help You Do Just That...

Many people have been enticed by the glamour and exhilaration of Forex trading only to become demoralized, and even give up, after just a few months.

Once people realize the wealth building potential of foreign exchange trading they quickly seek out some training, open an account, and start trading. Those who take this path, soon begin to question whether Forex trading is as easy as they originally anticipated.

They see many conflicting views about how to trade and many contrasting techniques being taught in the industry. As soon as they learn one trading method, they are looking to the next without ever demonstrating profitability.

Those same folks likely spend long hours sitting at their computers, staring at price charts, their trading platforms open and ready to place a trade. Despite the length of time spent deliberating over the trade, as soon as they open a position the market seems to turn against them...

Forex Trading Strategies That Eliminate Doubt, Allowing You To "Pull The Trigger" Confidently With The Knowledge That Your Trading Plan Will Work...

Forex trading does not have to be a difficult or lengthy process...

There are techniques of trading that will allow traders to systematically extract profits over-and-over, and multiply their accounts with truly astonishing returns on capital over a comparatively brief period of time.

The key to attaining such success is to master the fundamentals of how the foreign exchange markets work, then develop or learn the methods for trading profitability on a long-term consistent basis.

Once you have a viable trading plan in place and have learned to execute it that plan in a consistent and disciplined manner, you will likely be well on your way to achieving many of your financial goals.

Foreign Currency Trading As A Wealth Building Business Plan

Every day more and more people are discovering how easy it is to master the art of Forex trading.

Of course this business is not for everyone, but for those who learn to be at ease while trading in the foreign exchange currency markets, Forex trading can often be the wealth building vehicle ideal for attaining their goals.

Given access to the proper instruction, anyone who is dedicated and who has the desire to succeed as a currency trader can master this business in a short period of time. It simply requires a little self-motivation, positive thinking and the right training.

Getting Basic Forex Education For Free

Before you can run, you must walk...

Often, we want to jump into a new endeavor with both feet. When it comes to Forex trading, there is a risk of financial loss if we are too quick in pursuing our new foreign exchange trading business.

We must first learn the basics. There is no sense in spending a great deal of money to do this, because the basic information is available here, and elsewhere, for little or no money.

Nonetheless, you will eventually want to invest in a solid Forex trading course from a reputable educator. Our selection for this purpose is Bill Poulos' Forex Profit Accelerator.

The reasons why we have selected his course are based on 1.) his 30 years of trading experience and success, 2.) the unrivaled quality of the course, and 3.) the comprehensive support that is provided to each one of his students.

Take a moment to register below, and we will provide you with immedate access to a downloadable copy of Power Forex Profit Principles, which not only covers the fundamentals of the Forex market but also reveals a few "dirty little secrets" that many in the Forex industry would probably prefer you simply do not know about.

The FOREX WORLD - financial freedom!

The Forex market is the largest and most liquid financial market in the world. Thanks to the World Wide Web the Forex market is now accessible for everyone. Start with only USD 50 (approx. EUR 35) to trader in the Forex market and take your advantages out of it.

The revolution under the trading platforms:
● trade from 25$ (about 20€) position size
● Leverage from 1:100 to 1:400
● Real time trading platform
● No complicated trading systems and graphics
● Innovative and simple trading tools
● Continuously update of the trading
● Simple and user friendly software
● Software is available in 12 different languages
● Visualized trading platform
● Free and unlimited practice account
● Withdrawal via different payment tools
● Automatically Stop Loss in order to minimize risk
● Take Profit option in order to assure your profits
● Chat with other traders through the public or private chat
● excellent customer support
● Invite a friend – get $100 and for your friend $50

Use virtual money mode for practice. One of the unique features is that the platform provides you with a practice environment. Virtual money mode works exactly the same as real trading mode and uses the same real time rates, with the small difference of no risk involved. We recommend using the practice mode to get to know the platform and gain Forex trading experience.

Trust Yourself

When you turn on the TV (especially mainstream media) you are inundated with news of the demise of the dollar. Business news, national news and even your local news channels are leading into events with reports of the dollar and the economy. Analysts are featured and opinions are smattered across the airwaves in an attempt to provide an oracle response to current economic events.

Beware the source and follow your system.

In these volatile times it is easy to get caught up in the hype provide by all the news media and analyst. It is natural to want to look for guidance. Remember to trust your system and more important trust yourself. You, after all, are the single largest determinant of your success.

Your approach should remain consistent, almost impervious to the events occurring because you follow your plan with discipline and ruthless detail to executing at optimum performance.

Be disciplined and follow your plan. If market conditions don’t suite your style – sit this one out until conditions provide your with your personal edge!

Happy Trading!!

Do you have what it takes to become a successful Forex Trader?

Forex trading, or any trading for that matter, is an occupation that requires experience and the accumulation of proficiency not unlike any other highly skilled profession. Whether you are a leading executive at a major publically traded company, a professional golfer or trading from your kitchen table, there are 5 key ingredients that one must possess in order to become successful.

1. You must be Passionate about what you do.
As Forex traders we all face one unique set of circumstances that does not exist in any other profession. We get rewarded for when we succeed and equally punished when we don’t! Could you image a corporate worker one quarter receiving a significant accomplishment bonus and the next quarter actually getting money taken from their paycheck for missing performance targets? Not on your life!
We do as Forex traders and that is why passion for what you do will carry you through the tough times that are part of your trading business. Asked yourself why you trade currencies and would you still do it if Forex were not potentially lucrative? Your answers will be quite revealing. You’ve got to feel your passion for trading!

2. You have to Apply Yourself and work hard at it.
I talk to so many people that enter into Forex trading with the aspiration of getting rich quick. Without putting the time and energy into really getting good at trading I see them jump from strategy to strategy looking for the goose that will lay the golden egg and eventually quitting while blaming everything else, except the true cause.
I got news for you – you are the goose and your Forex education is the golden egg. The magic has always resided with the magician and not some strategy. Work hard at trading and the rewards will eventually come your way. Remember what Tiger Woods said, “Funny, the harder I work the luckier I get.” Apply yourself as a trader and it will be no accident when your account begins to blossom.

3. You must Focus to really get good at what you do.
Now here is the hurdle most Forex traders struggle to get over. You have the passion and you are applying yourself to your trade, now focus and really get good at just at what you are doing. Be the expert to the experts at just that one thing. Become the master of a strategy or risk management methodologies. Really focus on getting good at it.
Stop jumping around or getting pulled from the last “latest and greatest” into the next “latest and greatest” and focus on one aspect of Forex trading and know it inside out. Know it strengths and weakness. Set your sights on becoming expert on just one aspect of trading and watch it spill over in all other aspects for your currency trading. This is the time to fail forward fast, use every setback as a learning opportunity that will propel you 3-steps ahead!

4. You must Push Yourself beyond the point everyone else might have quite.
In Forex Trading this is simple. Assume there is someone on the other side of your trade that is pushing themselves and sharpening their edge. To be successful you must you must do the same thing. Now is the time to examine your mental edge. Do you know the single most critical factor in any currency trade? It is you, the trader! Sharpening you mental edge is the most difficult aspect of trading, but also the most rewarding.
Start with your Forex education and gain the self-awareness necessary to maximize your strengths and suppress your weaknesses. Any expert will tell you that trading is 80% mental. It’s time to sharpen your trading to the razor’s edge and you do this through Forex education. A constant and never ending process that will become the cornerstone of your Forex experience.

5. You must, without wavering, be Determined and Persist to your objective.
You will fail. I can state that emphatically. However, you will not be defeated unless you allow your failures to control your trading. It is the old adage; failure is not falling of your horse, failure is refusing to get back on. Your success depends on your ability to dismiss the criticism, rejection, self-doubt and pressures associated with Forex trading.

Defining what is a winning trade, losing trade and bad trade will go a long way into developing you as a successful trader. Without the determination and persistence in all aspects of your trading life, obstacle will definitely appear closer and larger than they actually are.

Take a moment and assess yourself and your trading. Do you have the key elements to succeed? Which areas are presents development opportunities? When conducting a self-evaluation it is critical to be totally upfront and honest with yourself. After all, you will only be dishonest with yourself. One of the most interesting observations you can make is that all key success factors are interwoven. One factor supports the other. This is why your Forex education is a continuous journey of forex strategy, money management and self-mastery. Set these factors as your Forex education goals and take your currency trading to new heights.

Happy Trading!!

Bold 2009 Prediction for You

Here's my bold prediction for you in 2009!

You will break your trading resolutions by the end of February.

You will abandon your trading plan
You will fall into the same destructive trading patterns you resolved to change
Your account will earn the same or less than in 2008

I know this this sounds harsh, but statistically speaking, that's what will happen to most traders. So, are you going to let this happen to you?

True, statistics cover populations and not individual traders. The fact is, its traders who are outside of th enorm and trade with focused discipline that really achieve their financial goals. When is now the time to re-focus with discipline and dedication and really commit yourself to your trading plan?

Today is January 15, 2009 and February is just around the corner.

Let this be your wake-up call!

Be honest with yourself and focus with the discipline of a seasoned trader on staying true to your trading plan or risk becoming a statistic!

Happy "Disciplined" Trading!!

Complimentary eBook: Download the full 60-page Deflation Survival eBook now

Part 2 of Elliott Wave International’s expansive NEW Deflation Survival eBook is online now. The free 60-page eBook is packed with Robert Prechter's most important teachings and warnings about deflation. This is one of the most valuable resources EWI has ever offered at no cost. Learn more below or download it now – for free.……………Greetings,
We contacted you earlier this week to tell you about an exciting, free 60-page eBook our friends at Elliott Wave International have just put together.
The new eBook is compiled from Bob Prechter’s most important teachings and warnings about deflation.
Much like Prechter’s wildly popular Independent Investor eBook, this new Deflation Survival eBook will transform the way you think – about inflation and deflation.
Most financial experts were caught completely of guard by the real estate top in 2005. Many thought the Dow Industrials index would sour well beyond its 14,000 peak. Others saw weakness in U.S. stocks but said the dollar would also crash and hyperinflation would immediately ensue.
Only ONE analyst, that we know of, made the following forecasts:

Real estate, stocks and commodities would all top.
A monumental credit crisis would reduce lending and borrowing around the world.
The dollar would rally.
Deflation would reign across almost all asset classes.

That analyst’s name is Robert Prechter.

Prechter – a man who’s made the arduous journey from fame to outcast and back – has scoured his complete writings on deflation and compiled the most important into a special 60-page Deflation Survival eBook.
Until today, most of the forecasts and advice in this still-prescient eBook have been released only to Prechter’s faithful subscribers. Now the 60-page Deflation Survival eBook can be yours for free.

Currency Trading-A Tiny Intro

Currency trading is nothing but the act of trading one currency of a country for another currency of another country. Currency trading is very easy to do and this trading is carried out at any part of the world and this can also be done even in vacation any part of the world.Forex trading is also known as currency trading or foreign exchange currency trading. The Forex traders who ply their luck and strategies in the Forex market, constantly exchange one currency for another currency. The Forex traders make their profits on the constantly changing exchange rates of global currencies in the Forex market.Forex trading is something very similar to that of trading in stocks. Stock market deals with the buying and selling of stocks by taking advantage of small fluctuations in stock price where as in the Forex market, the Forex trading takes place between two different currencies.Even though this is a very easy method of trading than other different trading methods. But still there are some problems in this Forex market.For example, in Nigeria, the central bank has made a decision to make restrictions on the currency transactions between the commercial banks in the country. Thus the foreign-exchange market has been halted due to the central bank’s decision. An explanation was given that the foreign exchange market should be for the use of customers and not for the inter-bank transactions.
if the banks have already made a buy in some currency and if they are not able sell it to any customer within 5 days from the date of acquiring it, the commercial bank should hand it over to the central bank.

Foreign Exchange Trading - Purchase Currency with Currency

There are lots of trading routes, which can be money making mints for investors or for a businessman; however, for someone who is interested in foreign currency trading, there is a market that functions around the globe; however, with associated risk. This market is a bit different from the rest of them.
Nothing like any other market, foreign exchange (as well named OTC forex market) is open for business the whole day except on weekends per specific country time zones. The main market for foreign currency trading is identified as the interbank market; and online trading keeps the trade live round the clock due to time zone variations following the path of the sun just about the globe each and every day.
Currency trading is not organized as a regulated exchange and eventually, there are associated risks and you got to study them well before you start up with forex trading.
As the market for foreign currency trading is open nearly all of the time, it gives enormous chances for timing your trades focusing on the benefits from your online trading sessions - whether you are with trading a foreign currency or whether you are stock trading with respect to the most favorable trends.
The worldwide Forex trading platforms which are online trading software will aid you to understand the turnover ratio which is accessible through the forex market. You got to browse through the informative web sites and doing just that sincerely can have your started.
Foreign exchange trading is the concurrent buying of one currency and selling of one more, you purchase currency with currency. The foreign exchange market (Forex or FX) is the biggest financial market in the globe with every day turnover of above $2.6 trillion.
Most currency dealings engage the “Majors” - US Dollar, Euro, Japanese Yen, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar.

Forex Strategies - Unstable Trends

Trading in foreign exchange currencies is not a lot like trading with stocks or with futures trading. In situations when you are dealing with unstable trends, there are forex trading strategies that provide investors with beneficial plans which can help them avoid bigger risk thereby avoiding big loss and making better profits in the short run. Though there are countless forex trading strategies accessible to the investor, real time experience matters a lot.

There are more than 100 million people in the globe who are searching for money-making investment opportunities. Chatting about investment is an interesting topic indeed. The major information, which will be useful for Forex trading are:

* Collection of data appropriate to Forex market trends.
* Forex Pivot Points which explains entry and exit signals.
* Well-known forex Charts Patterns and Trend lines.
* Euro to dollar Tricks.
* Be Smart to sort out different currency pairs.
* Be Positive to manage up and down trends.
* Shun the drawbacks of dumb investment.
* Clever stop/loss realization.
* History repeats itself and it can provide you with great tips. So, focus on history.

It is significant to train yourself on the most generally applied forex trading strategies prior to skipping into the forex trading process. In many cases the currency you buy can suddenly loose its value and the currency you sold could gain. That is the actual risk in the process of Forex and you trade the risk to make profits. That is the game all about.

Foreign Exchange Prevents Uncontrolled Capitalism

Foreign Exchange or FOREX for several years defended weaker countries from abusing, and essentially, defended them all from worsening economic trends, uncontrolled capitalism, and defaulting state debts.
In 1971 Foreign Exchange or FOREX experienced a drastic change permitting National Banks, Large Corporations, and private entrepreneurs to occupy a share in profit making use of Foreign Exchange or FOREX.
It relates to the acceptability of various currencies, buying and selling of paired currencies between various states, expecting to profit off from the foreign exchange rate.
All of this is carried out below the umbrella of the Foreign Exchange or FOREX. It a bit different from Wall Street or any of the other chief trading places of the globe, Foreign Exchange or FOREX has no universal main office. It is an internationally based trading area that operates five days a week twenty four hours a day.
To function and earn within the environment of Foreign Exchange or FOREX you have to be a professional trader with the self-assurance of realizing that risk, and you got to he able, sharp and supportive.
Euro to dollar conversion is one of the major processes in the forex market; however, it pays, if you will be recognizing the related risks so that you will know what you are trading for in the globe of Foreign Exchange or FOREX. If you would like to be on the profitable site, not being too greedy is the way to go.
In day trading, one and a half trillion dollars is exchanged utilizing the Foreign Exchange or FOREX, for a few it can denote massive profits, for others it can lead to overwhelming losses? The special character of Foreign Exchange or FOREX needs one to be skilled to work with advantage of information to deal successfully within the Foreign Exchange or FOREX.

The Role Of Rollover In FOREX Market

In the Foreign Exchange Market or Forex market, rollover is a way of extending the set clearing date or what is recognized as the settlement date of an open position.
Generally, in general currency trading, trading should be finished in two business days and traders who desire to extend their positions with no aim of settlement should close their positions earlier than 5:00 in the afternoon Eastern Standard Time on the date of settlement day, in addition re-opening of them should be on the subsequent trading day.
This denotes that by rolling above the position at the similar time will be closing down on the accessible positions at the every day close rate and yet again they will be coming to a fresh opening rate at the subsequent day trading. This exactly indicates that the trader is not directly prolonging the settlement date by another day.
This is as well identified as tomorrow next strategy, it is practical in forex because several traders do not have a reason of receiving the delivery of the currency they buy but in its place they work with the aim of getting profits from variable foreign exchange rates.
As rollovers push out the settlement by one or two trading days, it might possibly be a reason for gain or a charge to the trader per the accessible rates.
In fact, Rollover is while you invest funds from a mature security in to a novel one from the perspectives of a similar security. In simple terms, you are transferring the assets of one retirement plan to one more without the pain of tax consequences.

Forex Trading With a Focus on Volume

Categories: Foreign Currency Exchange, Foreign Exchange, Foreign Exchange Market, Foreign exchange trading, Online Forex trading, foreign exchange rates, forex broker, forex market, forex trading, forex trading platforms, learn forex trading, online forex, trading platforms
Just the once you have determined to go into Forex trading you will discover that Forex market has several benefits over other capital markets. As well as amongst others; it has considerably low margins, free forex trading platforms, high leverage and round-the-clock trading options. It is like a computerized forex broker you can vouch on for correct math.
In brief, it is significant to recognize on what are the most excellent hours to be carrying on with your trade. Some currencies are traded in huge volumes round the clock, while some others are not traded like that round the clock. There are specific times when volumes roll high for specific pairs. So, watch for peak business hours for the currency pair or pairs you are dealing with and then trade accordingly in the trading platforms.
If you desire to discover a considerable number of beneficial trades you require to go into the online forex market at the most excellent period of time, that is, while the activity, the amount of transactions, is the maximum in the Forex Trading Platforms.
At any specified time; someone, somewhere in the globe is buying and selling currencies. As one market closes, one more market opens. Business hours overlap, and the forex rates goes on as day becomes night and night becomes day, providing you 5.5 complete possible trading days. Statistics, journals and indicator charts are accessible for more analysis and it will be wise if you make maximal use of them. So, try your hopes and luck in here.

Forex Charting Software - Potential Currency Progresses

Categories: Foreign Currency Exchange, Foreign Exchange, Foreign Exchange Market, Foreign exchange trading, exchange rates, foreign currency, foreign currency conversion, forex charting software, forex market
Forex charting software is very vital in any kind of trade decisions relating to the foreign exchange market. The forex rates are going to be changing continually, to be aware of the continually changing pattern of fx rates the charts are going to be of great use.
Forex charting software provides you with complete details of the trends in a pattern, which will aid you to carry out your trading in a successful method.
Importance of Forex charting software
The situation of trading with foreign exchange market with the aid of forex charting is nearly similar to traveling in the clutches of a busy traffic. Things are going to be very randomly changing, but still you got to get in touch with the market details within flashing seconds.
If you are able to grasp an economic trend with the aid of the chart and if your decision making did help you with the play, then you can land up with good financial rewards in the long run. However, if you are going to overlook on the important points you are going to be likely trapped in confusions.
Reading the forex charts require just a basic skill; however, applying the trends in the market requires a great level of contextual decision making and skill level.
Forex charting provides you with a clear identity of the larger picture of where the market is progressing towards. You are also likely to witness the different events which are going to be possibly progressing with fairly big economic results.
Normally, the currency market on a day by day basis is not able to provide with the future trends precisely due to the top notch volatility. However, by using the forex charting, you will be able to note the alterations in the current market trends and you can make your own guess on the potential currency progresses. This will have you work in a way a step ahead in the resulting in economic profits.

Information About The Forex Indicators

There are lots of forex indicators out on the forex market, but for a few causes there are two eccentric but very powerful ones that a large number of traders every time look past. The % Bullish and Commitment of Traders Report are devices that can mark a few very important trends if you get the time to study them and place them in to excellent use.
Applying these two forex trading techniques will include a novel tool to your pocket. The majority of alterations take place as people find themselves to be too insatiable or are frightened of what is going on in the foreign exchange market. While either of these comes about, the value of the stock turns over and heads in the contradictory way.
If you desire to learn forex more after studying the forex tips to these two forex indicators here, there are lot more details existing if you decide to get benefit of these two indicators and apply them in your forex trading strategies.
The primary indicator is named the % Bullish. The % Bullish is just a review of present investors in the forex market. It estimates and rates the bullishness of the market. While the number is below 20%, you will locate that prices are usually being oversold and when it is showing up to be over 80%, they will be likely overbought.
The assurance of Traders report is a free report that will let you to follow the pathway of the most victorious traders in the business. Each week a report is published by the CFTC with an estimation of the happenings of the futures market and it will help you with recognizing these positions and making it particularly useful for anybody who are occupied in the forex market.

Watching Signal Providers Can Be The Key To Success

Categories: Foreign Currency Exchange, Foreign Exchange, Foreign Exchange Market, Foreign exchange trading, forex market, forex trading, learn forex trading
Trading Signals are provided by the forex trading company. A signal chart provides with the valuable advice for the traders to have a better success in the trading. They are called as signal providers. Signal providers are the experienced traders who have been in the forex industry for quite a stretched amount of time and they are those who have made some substantial earnings with their approaches. These signal providers will contribute their valuable information about the price ranging from low to high. With their information you have to pick out the apt guidelines that go with your trade.
You may have a question on who is the real signal provider? How do I pick them correctly? There are plenty of signal providers in the signal. The average traders will not pick up the apt signal provider and get into the network of the scam. The foremost advice for the traders is to find out to which category of trading they belong to? How long you wish to trade? Do you wish to trade quickly? What will be your initial investment? How will you manage the great loss? If you are clear with these questions then you can choose the apt signal provider for your trade. The good signal providers will always guide you in the right path for succeeding in the foreign exchange market trade.
Few worthy signal providers are mixed up with a huge mix of inexperienced advisors. Look in to the presentations and the reviews of the signal. You can access them with a second opinion from another user to inquire their about your concerned product. And also consider that your upcoming profits are dependent over the signal providers and decide cautiously.

Learning How To Avoid Failure in the Forex Market

One of the worst mistakes you can make is to have an awful broker, there are a lot out there and so make sure you choose the right one, do some research. I keep going on about having a good plan, but in all seriousness, a plan helps you to be consistent otherwise you will end up unfocused and with no direction, if you do have a plan, try and make sure that you stick to it, setting yourself goals that are realistic and achievable. Try not to dabble in many different currencies, focus on one as they each have a specific way of trading and if you try to focus on more than one, you will never understand each of their own peculiarities. Bill Poulos gives great advice in his Forex Income Engine course and I really do recommend sitting up and listening to him. You can take as long as you want to go through the course, as it is, if you like, elective learning.

Another mistake that many new traders make is to end up thinking about long term trades. In trading it is very much a live for the moment atmosphere. If you are a day trader thinking long term will not help you with your short term trades. Trend of long term are important but not when you have a short time period. I can never overstress how important it is not to be overconfident. Statistics have shown that there is an extremely high failure rate and so if you are doing well, try not to take it for granted and always make sure you take advice and any chance that you have to improve, take it. As mentioned in part 2, demo accounts can be misleading and I don’t rate them, for you learn to play with fake money and this can result in bad habits. The best thing to do is to enter trades can carry small risks to yourself and will not make or break you if you win or lose, this may be hard for some people as the temptation to trade big is very appealing but try and stay calm and focused and remember all the advice given.

Technical Analysis

You will find below a breif description of the major technical analysis techniques used in Forex trading. We suggest you open free demo account and test them with no risk.

Bollinger Bands

Moving Average Convergence Divergence

Moving Averages

Elliott waves

Stochastic

Relative Strength Index (RSI)

Fibonacci numbers

Gann numbers

Bollinger Bands

Bollinger Bands are a technical trading tool created by John Bollinger in the early 1980s. They arose from the need for adaptive trading bands and the observation that volatility was dynamic, not static as was widely believed at the time.

The purpose of Bollinger Bands is to provide a relative definition of high and low. By definition prices are high at the upper band and low at the lower band. This definition can aid in rigorous pattern recognition and is useful in comparing price action to the action of indicators to arrive at systematic trading decisions.

Bollinger Bands consist of a set of three curves drawn in relation to securities prices. The middle band is a measure of the intermediate-term trend, usually a simple moving average, that serves as the base for the upper and lower bands. The interval between the upper and lower bands and the middle band is determined by volatility, typically the standard deviation of the same data that were used for the average. The default parameters, 20 periods and two standard deviations, may be adjusted to suit your purposes:

Middle Bollinger Band = 20-period simple moving average

Upper Bollinger Band = Middle Bollinger Band + 2 * 20-period standard deviation

Lower Bollinger Band = Middle Bollinger Band - 2 * 20-period standard deviation

Two important tools are derived from the Bollinger Bands: BandWidth, a relative measure of the width of the bands, and %b, a measure of where the last price is in relation to the bands.

BandWidth = (Upper Bollinger Band - Lower Bollinger Band) / Middle Bollinger Band %b = (Last - Lower Bollinger Band) / (Upper Bollinger Band - Lower Bollinger Band)

MACD - Moving Average Convergence Divergence

MACD is a more detailed method of using moving averages to find trading signals from price charts. Developed by Gerald Appel, the MACD plots the difference between a 26-day exponential moving average and a 12-day exponential moving average. A 9-day moving average is generally used as a trigger line, meaning when the MACD crosses below this trigger it is a bearish signal and when it crosses above it, it's a bullish signal.

As with other studies, traders will look to MACD studies to provide early signals or divergences between market prices and a technical indicator. If the MACD turns positive and makes higher lows while prices are still tanking, this could be a strong buy signal.

Conversely, if the MACD makes lower highs while prices are making new highs, this could be a strong bearish divergence and a sell signal.
One final word of advice: Don't get too caught up in the mathematics involved in putting together each study. It is much more important to understand how and why studies can and should be manipulated based on the time periods and sensitivities that you determine are ideal for the currency you are trading.
These ideal levels can only be determined after applying several different parameters to each study until the charts and studies begin to reveal the "details behind the details."

Moving Averages

One of the most basic and widely used indicators in a technical analyst's tool box, moving averages help traders verify existing trends, identify emerging trends, and view overextended trends about to reverse. Moving averages are lines overlaid on a chart indicating long term price trends with short term fluctuations smoothed out. There are three basic types of moving averages:

Simple
Weighted
Exponential

A simple moving average gives equal weight to each price point over the specified period. The user defines whether the high, low, or close is used and these price points are added together and averaged. This average price point is then added to the existing string and a line is formed. With the addition of each new price point the sample set drops off the oldest point. The simple moving average is probably the most widely used moving average.

A weighted moving average gives more emphasis to the latest data. A weighted moving average multiplies each data point by a weighting factor which differs from day to day. These figures are added and divided by the sum of the weighting factors. A weighted moving average allows the user to successfully smooth out a curve while having the average more responsive to current price changes.

An exponential moving average is another way of "weighting" the more recent data. An exponential moving average multiplies a percentage of the most recent price by the previous period's average price. Defining the optimum moving average for a particular currency pair involves "curve fitting". Curve fitting is the process of selecting the right number of periods with the correct type of moving average to produce the results the user is trying to achieve. By trial and error, technicians work with the time periods to fit the price data.

Because the moving average is constantly changing based on the latest market data, many traders will use different "specified" time frames before they come up with a series of moving averages that are optimal for a particular currency.
For example, a trader might create a 5-day, a 15-day and a 30-day moving average for a currency and then plot them on his or her price chart. He might start out using simple moving averages and end up using weighted moving averages. In creating these moving averages, traders need to decide on the exact price data that will be used in this study; meaning closing prices vs. opening prices vs. high/low/close etc. After doing so, a series of lines are created that reflect the 5-day, 15-day and 30-day moving average of a currency.
Once the data is layered over a price chart, traders can determine how well these chosen periods keep track of the trend being followed. If, for example, a market is trending higher, you'd expect the 30-day moving average to be a very accurate trend line, providing a line of support for prices on their way higher. If prices seem too close under this 30-day moving average on several occasions without resulting in a halt in the up trend, a trader will simply adjust the time period to say a 45-day or 60-day moving average in order to optimize the average. In this way, the moving average will act as a trend line.
After determining the optimum moving average for a currency, this average price line can be used as a line of support in maintaining a long position or resistance in maintaining a short position. Breaches of this line can also be used as a signal that a currency is in the process of reversing course, in which case a trader will want to pare back an existing position or come up with entry levels for a new position. For example, if you determine that a 30-day moving average has shown itself to be a good support line for USD-JPY in an upward trending market, then market closes under this 30-day moving average line could be a signal that this trend could be running out of steam. However, it is important to wait for confirmation of these signals. One way to do this is to wait for another close below the level. On the second close under the average, you should begin to pare down your position. Another confirmation involves using other, shorter term moving averages.
While a longer term moving average can help to define and support a particular trend, shorter term moving averages can provide lead signals that a trend is ending before prices dip below your longer term moving average line. For this reason, most traders will plot several moving averages on the same chart. In a market that is trending higher, a shorter term moving average might signal a market reversal by turning down and crossing over the longer term moving average. For example, if you are using a 15-day and a 45-day moving average in a market that is in an up trend, and the 15-day moving average turns down and crosses over the 45-day moving average, this could be an early signal that the up trend is ending and it is probably time to begin to pare down your position.

10 Golden trading rules

These rules give you the fundamental guidelines to successful trading. In any case, remember that practice makes perfect so feel free to open a free demo trading account and test your strategies.

1. Plan your trade and trade your plan. You must have a trading plan to succeed. A trading plan should consist of a position, why you enter, stop loss point, profit taking level, plus a sound money management strategy. A good plan will remove all the emotions from your trades.

2. The trend is your friend. Do not buck the trend. When the market is bullish, go long. On the reverse, if the market is bearish, you short. Never go against the trend.
3. Focus on capital preservation. The most important step that you must take when you deal with your trading capital. You main goal is to preserve the capital. You should not trade more than 10% of your deposit in a single trade.
4. Know when to cut loss. If a trade goes against you, sell it and let go. Do not hold on to a bad trade hoping that the price will go up. Most likely, you end up losing more money. Before you enter a trade, decide your stop loss price, a price where you must sell when the trade turns sour. It depends on your risk profile as of how much you should set for the stop loss.

5. Take profit when the trade is good. Before entering a trade, decide how much profit you are willing to take. When a trade turns out to be good, take the profit. You can take profit all at one go, or take profit in stages. Once you have covered the spread, you have nothing to lose.
6. Be emotionless. Two biggest emotions in trading: greed and fear. Do not let greed and fear influence your trading plan.
7. Be an informed trader. Trade only when you have done your own research and analysis.
8. Keep a trading journal. When you buy a currency or stock, write down the reasons why you buy, and your feelings at that time. You do the same when you sell. Analyze and write down the mistakes you have made, as well as things that you have done right. By referring to your trading journal, you learn from your past mistakes. Improve on your mistakes, keep learning and keep improving.
9. When in doubt, stay out. When you have doubt and not sure where the market or stock is going, stay on the sideline. Sometimes, doing nothing is the best thing to do.
10. Do not overtrade. Ideally you should have 3-5 positions at a time. No more than that. If you have too many positions, you tend to be out of control and make emotional decisions when there is a change in market. Do not trade for the sake of trading.

What is forex ?

The foreign exchange (forex or FX) market exists wherever one currency is traded for another. It is the largest and most liquid financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The average daily trade in the global forex and related markets is continously growing and was last reported to be over US$ 4 trillion in April 2007 by the Bank for International Settlement; it is more than three times the aggregate amount of the US equity and treasury markets combined.

The forex market has no physical location and no central exchange. It operates through a global network of banks, corporations and individuals trading one currency for another. The lack of a physical exchange enables the forex market to operate on a 24-hour basis, spanning from one zone to another in all the major financial centers.

How is forex traded?

Currency prices only fluctuate relative to another currency, so they are always priced and traded in pairs. For example, the most traded pair is the euro against the US dollar, for which the abbreviation is EUR/USD. Below are the most traded currency pairs, also called majors:

EUR/USD Euro - US Dollar

USD/JPY US Dollar - Japanese Yen
GBP/USD British Pound - US Dollar
USD/CHF US Dollar - Swiss Franc
USD/CAD US Dollar - Canadian Dollar
AUD/USD Australian Dollar - US Dollar
NZD/USD New Zealand Dollar - US Dollar

Execution and prices

Every pip counts and every millisecond counts! Exto Capital is focused on giving you the best potential for generating profits. We provide our clients with extremely competitive trading conditions and advanced trading tools with fast and precise execution capability.

We strive to provide you trading environment with no requotes, no slippage, and instant execution.

Exto Capital benefits from multiple liquidity providers and access to a very large pool of liquidity. This allows our systems to obtain more precise pricing, fractional pips, low spreads, and by getting the best bid/ask prices, allows us to reduce price volatility.

During normal market conditions, the orders are executed at prices the client clicks without any slippage. Spreads are kept at minimum levels. Orders are executed at the price designated by the client.

Trading platform: Please note that our platform updates tradable price quotes very rapidly. If you have a very slow internet connection, when you click on a price, by the time your order reaches our servers, the price may have changed already. In such case the server may ask you to accept the new price if you wish. This is not a manual re-quote.During volatile market conditions, such as market moving news or very active markets, spreads provided by liquidity providers may widen as they cover their risk or reduce their exposure. Spot orders will be executed at market prices if prices have not moved within latency times. Transactions will not be filled at a different price than the one designated by you.

A similar situation can exist during illiquid markets with low volume of transactions. For example, this can happen during the last 1-2 hours before markets close in New York on Friday or the first few hours when the markets reopen after the weekend up to the time that trading volume ramps up in Tokyo approximately 00:00 GMT (Sunday 20:00 EST, Monday 02:00 CET)

During weekends, the markets are closed and no transactions can be entered on the trading platform. Please be aware of weekend market gaps from Friday close to Sunday opening of the market. Orders entered before the market opens on Sunday are executed at first available price available for the transaction size.

Overnight rollover

Exto Capital pays or charges clients rollover interest at competitive rollover rates for all open standard and institutional positions. Exto Capital adopts a method of operation by which there are no value dates on any operations and no close out and re-opening of open positions at close of business. We call this process a synthetic spot transaction. This results in a simple one line transaction on the customer's transaction statement instead of an extremely complicated multi-entry statement.

Forex rollover
At the end of the trading day, at 23:00 UTC, an account with any open positions is either credited or debited interest on the full size of the positions. This is known as rollover interest. Rollover interest is calculated based on the full value of the client's position rather than the value of the margin or collateral necessary to take on that position. Whether an account is credited or debited depends on the direction of the client's position and the interest rate differential between the two currencies involved. For instance, the primary interest rates in UK are much higher than in Japan, so if a trader buys GBP, he or she will earn interest at 23:00 UTC. On the other hand, if he or she sells GBP in this currency pair, he or she will pay interest at 23:00 UTC.

CFD rollover
Some positions held past 23:00 UTC will be subject to rollover and be charged or credited this cost. To see this cost, you can refer the the "Swaps Sell" and "Swaps Buy" columns in the "Instruments" window of our platform. Depending on the instrument you are trading, this pricing is set at 0% to 8% per annum of the notional value of the position. Shares are are charged 8% per annum for long positions and 2% per annum for short positions.

Trading hours

Forex trading hours are from Sunday 22:00 GMT (18:00 EST; 24:00 CET) to Friday 21:00 GMT (17:00 EST: 23:00 CET).

During this period, the trading platform is operational and clients can enter transactions on the trading platform.

Please note that certain instruments are not tradable 24 hours a day:

Trading of CFDs on shares and share indices (CAC 40, FTSE30, Dow Jones Industrials, etc.) is also limited to open hours of underlying markets. For more information on trading time of CFDs please refer to the CFD trading conditions.

Gold (XAU/USD) and Silver (XAG/USD) are not tradable from 21:00 GMT to 22:00 GMT.

One-click trading

With one-click trading, you can open or close a position with one click - simple and very fast. This is an option that you can choose to activate/deactivate on your account if you wish.
As trades are directly executed as soon as you click on the buy or sell button without any prior confirmation window, it is strongly recommended that you try this option on a demo account first. If you have only limited experience with this type of on-line trading, we suggest you practice thoroughly on your demo account or limit the use of this option on your live account.

Tighter spreads with fracional pip pricing

Exto Capital trading platform offers fractional pips or decimalized pricing. Currency prices are quoted in tenths of a pip providing more precise prices and lower spreads. You can take advantage of the smallest price movements and with tighter spreads transactions costs are kept at minimum.The digit representing a 10th of a pip appears in small subscript (red circle).Pip value or tick movement with fractional pips:A one pip movement in GBP/USD from 1.4520 to 1.4521 is valued at $10 for a standard lot (100,000) or $1 for a mini lot (10,000). With fractional pips, a tick movement from 1.45215 to 1.45216 is valued at $1 for a standard lot or $0.01 for a mini lot.

Exto Capital advantages

Exto Capital is focused on giving you the best potential for generating profits and growing your investments. This is achieved by offering the most efficient trading tools, competitive conditions, and multiple products with high profit potential. We are constantly improving our technology base so that you get the highest quality execution and access to the world's leading liquidity providers covering more than 80% of the market. Furthermore, we are constantly adding to our product offering and improving our conditions, so that you can continue benefiting from the best opportunities.We recommend that you open a risk-free demo account to evaluate the details for your-self and contact us should you need any assistance or information. Once you are ready to trade, you can open a trading account within minutes.
Key advantages
At Exto Capital, we have focused on the three core points that provide our customers with one of the best trading experiences in the market. These tree pillars come together to offer you a comprehensive and profitable trading package.

FXDD Auto - Forex Trading Software

FXDDAuto provides FXDD clients a fully automated trading system that executes signals and strategies from third party signal providers in an FXDD trading account.
With the FXDD Auto platform, traders have the ability to monitor, control and configure trades from signal providers. A trader's presence is not required to enter or exit trades. Execution and money management is automatic, and includes trailing stop losses, stop and limit orders and trade updates.

:: Forex Trading

Forex trading isn’t strange words for those who looking forward to make quick profit in the financial market. Most investors will have at least hear or read about Forex trading. If Forex is a new term to you, please do read the Introduction to the Forex market before proceed reading this Forex trading article.

Forex trading is said to be the highest risk with highest return investment (or speculation game to be more accurate) in the financial market. The amount traded in the Forex market is much larger than any stock market or even combining few stock markets. Forex trading is simply a world wide trading market running 24 hours from Monday to Friday.

Everyday, there are new Forex traders entering into trading Forex. Some of them don’t even fully understand how Forex is traded but have already trading Forex. They are not idiot who want to burn their hard earned money, it’s just because Forex market is simply too lucrative market to enter with extreme high return. Any Forex traders can easily make a double return just in few minutes time trading Forex.

Forex trading is the trading of buying or selling certain currency. For example, buying US Dollar, then selling it later at a higher price to gain profit. Forex traders may also first sell US Dollar and later on buy it back at a lower price with the same gaining profit. It’s simple strategy of selling price minus buying price to make profit. In Forex trading, we just treat currency as a good, buy it and sell it.

You might now think how can Forex trading make huge profit just by selling and buying currency? Forex is traded using margin, Forex traders don’t need to full amount to buy any currency. For example, Forex traders just need 1000 Dollar to buy up 100,000 Dollar. This allows any Forex traders to make huge profit with little money.

Another important factor that any Forex traders can make huge profit is the high fluctuation for currency. Every day every seconds, the currency exchange rate is moving up and down, the Forex exchange rate fluctuate more heavily whenever there is any important economic data being released.

Forex trading is simply sounds too easy for anyone to make profit in very short time. But before you committed into Forex trading, it is strongly advised to have full understanding in Forex trading. Do read up other Forex trading articles in this website and share Forex trading knowledge in the Forex forums.

:: Famous Forex Quotes

“If you get in on Jones’ tip; get out on Jones’ tip”. If you are riding another person’s idea, ride it all the way.

Run early or not at all. Don't be an eleven o'clock bull or a five o'clock bear.

Woodrow Wilson said, "a governments first priority is to organize the common interest against special interests". Successful traders seek out market opportunities capitalizing on the reality that government's first priority is rarely achieved.

People who buy headlines eventually end up selling newspapers.

If you do not know who you are, the market is an expensive place to find out.

Never give advice-the smart don't need it and the stupid don't heed it.

Disregard all prognostications. In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word-nobody! Thus the successful trader bases no moves on what supposedly will happen but reacts instead to what does happen.

Worry is not a sickness but a sign of health. If you are not worried, you are not risking enough.

Except in unusual circumstances, get in the habit of taking your profit too soon. Don't torment yourself if a trade continues winning without you. Chances are it won't continue long. If it does console yourself by thinking of all the times when liquidating early preserved gains you would otherwise have lost.

When the ship starts to sink, don't pray-jump!

Life never happens in a straight line. Any adult knows this. But we can too easily be hypnotized into forgetting it when contemplating a chart. Beware of the chartist's illusion.

Optimism means expecting the best, but confidence means knowing how you will handle the worst. Never make a move if you are merely optimistic.
Whatever you do, whether you bet with the herd or against, think it through independently first.

Repeatedly reevaluate your open positions. Keep asking yourself: would I put my money into this if it were presented to me for the first time today? Is this trade progressing toward the ending position I envisioned?

It is a safe bet that the money lost by (short term) speculation is small compared with the gigantic sums lost by those who let their investments "ride". Long term investors are the biggest gamblers as after they make a trade they often times stay with it and end up losing it all. The intelligent trader will . By acting promptly-hold losses to a minimum.

As a rule of thumb good trend lines should touch at least three previous highs or lows. The more points the line catches, the better the line.

Volume and open interest are as important to the technician as price.

The clearest and easiest way to determine a trend is from previous highs and lows. Higher highs and higher lows mark an uptrend, lower highs and lower lows mark a downtrend.

Don't sell a quiet market after a fall because a low volume sell-off is actually a very bullish situation.

Prices are made in the minds of men, not in the soybean field: fear and greed can temporarily drive prices far beyond their so called real value.

When the market breaks through a weekly or monthly high, it is a buy signal. When it breaks through the previous weekly or monthly low, it is a sell signal.
Every sunken ship has a chart.

Take a trading break. A break will give you a detached view of the market and a fresh look at yourself and the way you want to trade for the next several weeks.
Assimilate into your very bones a set of trading rules that works for you.

The final phase in a bull move is an accelerated runaway near the top. In this phase, the market always makes you believe that you have underestimated the potential bull market. The temptation to continue pyramiding your position is strong as profits have now swelled to the point that you believe your account can stand any setback. It is imperative at this juncture to take profits on your pyramids and reduce the position back to base levels. The base position is then liquidated when it becomes apparent that the move has ended.

::What Is The Difference Between Forex and Futures?

A Forex trader could trade more transaction compared to the futures market (the trading volume could be a times larger), and the risk will be strictly under control. The trading volume of the Forex market is 46 times larger compared to the futures market, moreover Forex traders could make more profit from the Forex market due to the larger trading volume (the transaction volume is a few times larger), the REFCO Switzerland rich transaction platform allowed transaction between 1-100 times to be carry on, moreover a Forex trader could decide his or her own transaction amount, for example: Your account has $30,000, the basic transaction unit is each $1,000 (which transaction amount in $1.00, million), namely, so the proportion of the margin of each transaction unit is 100:1.

The risk of the Forex trader is under control, such margin call will not happen compared to futures, through the Forex trading system, your risk will receive the strict limit, even if your margin if lower then the deposit required, the Forex trading system will automatically settle your position, this means even if a Forex trader suffered losses, moreover if the market is suffering from a disaster fluctuation, your loss could not surpass your account amount. In order to understand the advantages, please apply for the demo account to carry on the complete zero risk.

A Forex trader will receive a large limitation of liquidation and a relatively fair market because the trading volume of the Forex market is large and it is also the largest liquidation market in the world. At present the trading volume in the Forex market is 140 billion Dollars, such big market will completely digest your transaction cash.

A Forex trader may do 24 hours transactions and other markets are different, the Forex market is a 24 hour linkages market, it starts from every Sunday before dawn Australian Sydney market, substandard collect the transaction center Singapore, Tokyo, London, Frankfurt to New York continuously to open, such linkage market enable you to do 24 hours transactions, also provide flexibility for Forex trader to do transaction.

:: Forex Charts

Forex charts assist the investor by providing a visual representation of exchange rate fluctuations. Many variables affect currency exchange rates, such as interest rates, bank policies, geopolitics, and even the time of day may affect exchange rates.

In order to help the investor attempt to predict when or in what direction a rate may change, advisors provide forex charts. Quality forex websites provide subscribers with a daily newsletter that includes a forex chart, forex signals and a forex forecast.

There are a variety of forex charts available for the investor to use and study. Some are very simple using only a couple of forex signals or indicators and are ideal for beginners. Others include 30 or 40 forex signals or indicators and live on-line streaming data so that the investor may analyze trades quickly and accurately.

In order to make an accurate forex forecast, it would seem that the more indicators, the better, but some analysts prefer a simpler system.

The idea behind studying forex charts is that history repeats itself. Instead of trying to “see the future”, a forex forecast evaluates the past. That is to say that the analyst who is responsible for attempting to predict future currency moves analyzes what happened to an exchange rate yesterday, last week, last month or last year and uses this knowledge to the best degree he knows how.

Some people trade short term, some intermediate term, and some long term. All three types of traders may benefit from the use of forex charts, just adapted to their own trading time frame.

Investors also create their own forex charts to evaluate their own performance. Creating a forex strategy for oneself is the goal of many investors. Instead of looking to a professional to analyze forex signals, these investors choose to create their own forex forecast.

Others, however, create their own strategy but also follow the opinions of professional currency traders at the same time. It all depends on your personal preferences.

There are other forex charts that deal with known correlations between two currency pairs, that is, how they move in relation to each other. Some exchange rates are known to affect other exchange rates, either by moving in the same or the opposite direction depending on the correlation.

Charts are available that explain these correlations in detail and show which pairs have strong correlations or strong negative correlations, so that an investor can use the movement of the exchange rate of one currency as a signal to trade another currency. These correlations are also the basis for some forex forecasts.

It can be difficult and overwhelming to enter the world of forex trading alone. Experts recommend education, practice with a demo account and advice from a reputable broker who is backed by a quality institution. Learning to read forex charts and evaluate forex signals is a skill that comes with time, skills that are essential when an accurate forex forecast is the the goal.

:: Characteristics of Forex Market

In recent years, the foreign exchange market could favor more and more people, it becomes a favorite for the international investors, and this is strongly related to the characteristics of the Forex market. The main characteristics of the foreign exchange market are:

1st, It consists market but no trading field

The finance industry in the western countries consist two sets of systems, namely the centralism business central operation and there is no fixed place for such business network. Stock trading is being traded through stock exchange. Like the New York Stock Exchange, the London stock market, the Tokyo stock market, respectively is American, English, the Japanese stock main transaction place, it is a centralism business financial commodity, its quoted price, the transaction time and hand over to the procedure all consist of unification the stipulation, and has established the same business association, it has formulated the same business rules. The investor could buy and sells the commodity through the broker company, this is known as "consist of trading market and trading field".

But foreign exchange business is done without any unification operation market and business network, it has no centralism unified place like the stock transaction. But, the foreign currency trading network actually is globally, and it has formed a organization which has no formal organization, the market is relied through an approval way and the advanced information system, Forex traders do not consist any membership qualification for any organization, but must obtain colleague’s trust and approval. This kind of Forex market which has no trading field is known as "consist of market but no trading field". Each day, the trading volume in the global Forex market involves billions of U.S dollars, the so huge large amount fund, is being control under both the non-centralism place and non central governance system, plus it is settle based on non-government governance.

2nd, Circulation work

Due to the different geographical position of the various financial centre, the Asian market, the European market, the Americas market because of the time difference relations, it has become an entire day 24 hour continued operation whole world foreign exchange market.

Early morning 0830 (New York time) New York market opens, 0930 Chicago market opens, 1830 Sydney opens, 1930 Tokyo opens, 2030 Hong Kong, Singapore open, before dawn 1430 Frankfurt opens, 1530 o'clock London market opens. So 24 hours uninterrupted movements, the foreign exchange market becomes a day and night market, only on Saturday, Sunday as well as the various countries' significant holiday, the foreign exchange market only then can close.

This kind of continued operation, provided no time and spatial barrier ideal outlet for investors, the Forex trader may seek the best opportunity to carry on the transaction. For instance, Forex trader buys up the Japanese Yen in the morning at the New York market, in the evening Hong Kong market opens the Japanese Yen rises, the Forex trader sells in the Hong Kong market, no matter Forex trader in where, he all may participate in any market, any time business. Therefore, the foreign exchange market may say is does not have the time and the spatial barrier market.

3rd, Zero and Game

In the stock market, the rise or the drop of stock market could influence the value of the stock whether to rise or drop, for example the Japanese new date iron stock price falls from 800 Japanese Yen to 400 Japanese Yen, the value of this stock has been reduced to half. However, in the foreign exchange market, the value of a stock and a currency is being calculated differently, this is because the exchange rate is refers to the exchange ratio both countries currency, the exchange rate change will influence one kind of monetary value to reduce and at the same time another kind of monetary value increase. For instance in 22 years ago, 1 US dollar exchanges 360 Japanese Yen, at present, 1 US dollar exchanges 110 Japanese Yen, this explains the Japanese Yen currency value rise, but US dollar currency value drops, in the end the value will not reduce or increase. Therefore, some people described the foreign currency trading is "zero and the game", exactly said is the wealth shift.

In recent years, investment foreign exchange market fund has continuously increased, the exchange rate fluctuation expands day by day, urges the wealth shift to be larger, the daily trading volume of the global foreign exchange involves 150 billion US dollars, the rise or falls 1%, means that the 150 billion funds has been shifted. Although the foreign exchange rate change is very big, but, any kind of currency will not become waste paper, even if some kind of currency unceasingly falls, however, but generally it represents certain value, only if such currency has been abolished.

:: Foreign Exchange (Forex) Market

Presently, there are various kinds of financial market, it is divided into: Stock market, interest market (including bond, commercial bill and so on), gold market (including gold, platinum, silver), futures market (including grain, cotton and kapok, oil and so on), option market and foreign exchange market or forex market and so on.

The foreign exchange market is a place to trade foreign exchange currency, or it is also a place for the transaction of all foreign currency. The foreign exchange market therefore is existence, because of:

Trade and investment

Import and export business, people pays one kind of currency when doing business, but when earns another kind of currency when receive the commodity. This means that, when settling account, business people will pay and receive different currencies. Therefore, they must convert the currencies that they received into the currencies that they could buy commodities. With this similar, when buying a foreign property a company must use the concerned country's currency to make payment, therefore, it needs to convert the domestic currency is concerned country's currency.

Speculation

Currencies exchange rates could fluctuate according to the demand and supply between two currencies. A Forex trader buys up one kind of currency in an exchange rate, but up casts this currency in another more advantageous exchange rate, he may gain. Speculation has occupied most of the Forex market.

Hedging

Due to the fluctuation between two currencies, those companies who owns foreign asset (for example factory), when these companies convert these properties into cost country currencies, there consist of certain risks. When the value of a foreign asset which is estimated based on foreign currencies remained unchanged, if the exchange rate changes, when converting this property value according to the domestic currency, there could be profit and loss. The company may eliminate such hidden risk through hedging. This carries out a foreign currency trading, its transaction result just counterbalances the foreign currency property profit and loss which produces by the exchange rate change.

Forex Market Development

The history of the Forex market as an international capital speculation market is much shorter compared the stock, the gold, the stock, the interest market, but it is developing in an astonishing speed. Today, the foreign exchange market daily trading volume has amounted to 150 billion US dollars, it’s scale has gone far beyond the stock, the stock and other finance commodity markets, it has became the world's most biggest sole finance market and the also the speculation market. Since the birth of the foreign exchange market, the fluctuation of the exchange rate of the Forex market is becoming bigger. In September 1985, 1 US dollar exchanged 220 Japanese Yen, but in May 1986, 1 US dollar only could exchange 160 Japanese Yen, in 8 months, the Japanese Yen has revalued 27%. In recent years, the foreign exchange market wave amplitude has been bigger, on September 8, 1992, 1 pound exchanged 2.0100 US dollars, on November 10, 1 pound exchanged 1.5080 US dollars, in the short two months, the pound exchanged US dollar exchange rate to fall more than 5,000, depreciated 25%. Not only that, presently, everyday the fluctuation of the exchange rate of the Forex market enlarges unceasingly, within a day the rise and drop 2% to 3% is commonly seen. On September 16, 1992, the pound exchanged US dollar from 1.8755 to fall to 1.7850, the pound on first lowers 5%.
Due to the large fluctuation of the Forex market, it has created more opportunities for the investor, attracted more and more investors to join this ranks.

:: The Foreign Exchange Rate

In the international market, the Foreign Exchange rate is demonstrated by five numerals, for example:

EUR/USD 1.2653

USD/JPY 107.65

GBP/JPY 195.03

The Exchange Rate Change

The exchange rate smallest change for the final figure (is 1 pip), for example:

The EUR/USD smallest change is 0.0001

USD/JPY smallest change is 0.01

Quoted Price

All quoted prices can be divided into direct quoted price and the indirect quoted price, for example:

The direct quoted price currency includes: EUR/USD, GBP/USD, AUD/USD, NZD/USD ......

The indirect quoted price currency includes: USD/JPY, USD/CHF, USD/CAD ....

For example, the EUR/USD quoted price is 1.2653, which means each euro could convert to 1.2653 US dollars, while the USD/JPY quoted price is 107.65, which means that each US dollar could convert to 107.65 Japanese Yen.

The buying price and the selling price of the foreign currency is decided by the bank or the broker house, customer decides only the buying trend. For example, the EUR/USD quoted price general demonstration is 1.2652/57, which means the broker house is willing to buy Euro dollar at the price of 1.2652, and sell at the price of 1.2657. At this time, the price difference between the buyer and the seller (pip difference) is 5 pips, for foreign exchange trading, the smaller the point means the trading cost is lower and the chance of profit making is much larger.

:: Introduction to Foreign Exchange Markets

Being the main force driving the global economic market, currency is no doubt an essential element for a country. However, in order for all the countries with different currencies to trade with one another, a system of exchange rate between their currencies is needed; this system, is formally known as foreign exchange or currency exchange.

In the early days, the system of currency exchange is supported solely by the gold amount held in the vault of a country. However, this system is no longer appropriate now due to inflation and hence, the value of one’s currency nowadays is determined through the market forces alone. In order to determine the value of a currency’s exchange rate, two main types of system is used which is floating currency and pegged currency.

For floating exchange rate, its value is determined by the supply and demand of the global market where the supply and demand is bound by all these factors such as foreign investment, inflation and ratios of import and export. Normally, this system is adopted by most of the advance countries like for example UK, US and Canada. All of these countries have a similarity where their market is well developed and stable in economic terms. These countries choose to practice this system due to the reason where floating exchange rate is proven to be much more efficient compared to the pegged exchange rate. The reason behind this is because for floating exchange rate, the market itself will re-adjust the exchange rate real-time in order to portray the actual inflation and other economic forces. However, every system has its own flaw and so does the floating exchange rate system. For instance, if a country suffers from economic instability due to various reasons such as political issues, a floating exchange rate system will certainly discourage investment due to the high risk of suffering from inflationary disaster or sudden slump in exchange rate.

Another form of exchange rate is known as pegged exchange rate. This is a system where the value of the exchange rate is fixed by the government of a country and not the supply and demand of the market. This system is called pegged exchange rate because the value of a country’s currency is fixed to another country’s currency. As a result, the value of the pegged currency will not fluctuate unlike the floating currency. The working principle behind this system is slightly complicated where the government of a country will fixed the exchange rate of their currency and when there is a demand for a certain currency resulting a rise in the exchange rate, the government will have to release enough of that currency into the market in order to meet that demand. However, there is a fatal flaw in this system where if the pegged exchange rate is not controlled properly, panics may arise within the country and as a result of that, people will be rushing to exchange their money into a more stable currency. When that happens, the sudden overflow of that country’s currency into the market will decrease the value of their exchange rate and in the end, their currency will be worthless. Due to this reason, only those under-developed or developing countries will practice this method as a form to control the inflation rate.

However, the truth is, most of the countries do not fully practice the floating exchange rate or the pegged exchange rate method in reality. Instead, they use a hybrid system known as floating peg. Floating peg is the combination of the two main systems where one country will normally fixed their exchange rate to the US Dollars and after that, they will constantly review their peg rate in order to stay in line with the actual market value.

The Foreign exchange market, or commonly known as FOREX, is the largest and most prolific financial market because each day, more than 1 trillion worth of currency exchange takes place between investors, speculators and countries. From this, we can deduce that the actual mechanism behind the world of foreign exchange is far more complicated than what we may already know, and that, the information mentioned earlier is just the tip of an iceberg.