What Is Forex

WHAT IS FOREX

The simple sense of Forex (Forex currency exchange, Foreign Exchange) is simultaneous purchase and sale of the currency or the exchange of one country's currency for the one of another countr. Forex is an interbank market that was created in 1971 when international trade transitioned from fixed to floating exchange rates. Since then the rates of currencies relative to each other are determined by the most obvious means which is the exchange at a mutually agreed rate. The Forex market is a non-stop cash market where currencies of nations are traded, typically via brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets and traders' investments increase or decrease in value based upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events.

WHAT IS FOREX

The simple sense of Forex (Forex currency exchange, Foreign Exchange) is simultaneous purchase and sale of the currency or the exchange of one country's currency for the one of another countr. Forex is an interbank market that was created in 1971 when international trade transitioned from fixed to floating exchange rates. Since then the rates of currencies relative to each other are determined by the most obvious means which is the exchange at a mutually agreed rate. The Forex market is a non-stop cash market where currencies of nations are traded, typically via brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets and traders' investments increase or decrease in value based upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events.

The forex 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 currently is almost US$ 4 trillion.

The main enticements of currency dealing to private investors and attractions for short-term Forex trading are:

1. 24-hour trading, 5 days a week with non-stop access to global Forex dealers.

2. An enormous liquid market making it easy to trade most currencies.

3. Volatile markets offering profit opportunities.

4. Standard instruments for controlling risk exposure.

5. The ability to profit in rising or falling markets.

6. Leveraged trading with low margin requirements.
7. Many options for zero commission trading.

The investor's goal in Forex trading is to profit from foreign currency movements. Forex trading or currency trading is always done in currency pairs. The world currencies do not have a fixed exchange rate and are always fluctuating being traded in the currency pairs Investments usually deal with 4 major pairs: Euro against US dollar, US dollar against Japanese yen, British pound against US dollar, and US dollar against Swiss franc or EUR/USD, USD/JPY, GBP/USD, and USD/CHF used to sign these pairs accordingly. These major pairs are considered as Forex market's "blue chips". You will not receive any dividends on the currencies. Well known "buy low - sell high" gives the profit for currency trades.

Links
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1. moneycentral.com
2. www.forex.com
3. cnbc.com
4. nymex.com
5. earnforex.com
6. http://www.vibby.net/main-e-club.php?screen=FA
7. http://hanzhouforex.blogspot.com
8. Decom MqL4
9. http://myforexstrategy.blogspot.com/?expref=next-blog
10. http://www.abiyanto.net/?page_id=139
11. http://www.mql4.com/
12. http://mircku.blogspot.com
13. http://www.masterclickcom.com
14. http://10toolsrolodex.howtosimplyautomate.com/
15. http://translate.google.com/translate?u=http%3A%2F%2Fhowtosimplyautomate.com%2FBlog%2F%3Fp%3D120&langpair=en|id&hl=en

Global Forex News

Forex (Foreign Exchange)


1. Fundamental Analysis

Economy Indicators

Fundamental analysis involve a lot of analysis on the macroeconomic situation.

Thus, economy indicators of the country such as GDP growth rates, unemployment rates, retail sales, and interest rate are used heavily in when valuating a country's currency. Some of the frequent used economy indicators in Forex trading are as below (Click in each for detail explanations):

• The Gross Domestic Product (GDP)
• Retail Sales
• Interest Rates
• Unemployment Rate

Besides those listed above, other fundamental factors used to analysis the currency strength include Industrial Production Reports, Consumer Price Index (CPI), Manufacturing PMI-ISM, and Manufacturing Production. We will cover each of these indicators from time to time.

How are indicators used in Forex fundamentals trading?

A country's economic situation refelects directly onto the currecny trading world. Hence, it is important for a Forex traders to keep an close eye on the financial clalender release by it country itself or private sectors. It is important to keep in mind, however, that the indicators discussed above are not the only things that affect a currency's price. There are third-party reports, technical factors, and many other things that also can drastically affect a currency's valuation.

Also, it is recommended to study the fundamental aspects of several country whenever trading in the forex market. For those countries that have strong political/economical connection, currencies value flux hand-in-hand. Thus researching a few countru in a trade is necessary.

Some useful tips when implementing fundamentals analysis in Forex trading are:*

• Economic calendar: When and where. Currency values response sharply to certain release of economy indicators. Keep an close eyes on the currency price trend whenver there is a release on related economy indicators.
• Be informed about the economic indicators that are capturing most of the market's attention at any given time. Such indicators are catalysts for the largest price and volume movements. For example, when the U.S. dollar is weak, inflation is often one of the most watched indicators.
• Know the market expectations for the data, and then pay attention to whether or not the expectations are met. That is far more important than the data itself. Occasionally, there is a drastic difference between the expectations and actual results and, if there is, be aware of the possible justifications for this difference.

*References from http://www.investopedia.com/articles/trading/04/031704.asp

2. From Fundamentals to Technicals in FX Market

Pure fundamental trading is very problematics. Without a doubt the analysis is very effective in predicting the overall economic condition and the market behavior.

It gives clear picture on general economy health of certain entity (a country in case of Forex) and shows how economy situation become what it is now as well as predicting the overall economic growth trend in the future.

However, information obtained thru fundamental studies often fails to signify short term fluctuation in Forex market. Thus, it is wise to apply precise techniques to convert fundamental study’s results into accurate entry/exit price indicators.

This will then bring us to the topic of Technical Analysis in Forex trading.

Economic Calendar

This Economic Calendar is developed and provided by FxFisherman.com, a huge forex trading community.