Beginners Guide to Forex

[amarnath]

The FX markets offer a similar or greater leverage than the furtures markets - depending on your broker. Obviously it does not mean that it is good - just a question of how much risk you feel comfortable with. As traderji has pointed out it is truly a 24 hour global market and thus one can use 24 hour basis stop loss. A great advantage that will allow one peaceful sleep. Interbank FX market hardly ever gaps - beauty of a 24 hour market - unlike stock markets opening say 100 or 200 points lower.

Nautilus

Remember there is no broker / bank offers STOP LOSS gaurentee during economic releases and certain volatile conditions

 

[amarnath]

Sir,

good to hear about FX trading. Can you provide information wheather an individual can trade in India in FX, who is providing the traging platform,etc.

Thanks,

4candles

Forex market is shark infested ocean but there are many good and regulated brokers were deposits are safe.

 

[amarnath]

Beginners Guide to Forex

What is Foreign Exchange?
The Foreign Exchange market, also referred to as the "Forex" or "FX" market, is the largest financial market in the world, with a daily average turnover of approximately US$1.5 trillion. Foreign Exchange is the simultaneous buying of one currency and selling of another. The world's currencies are on a floating exchange rate and are always traded in pairs, for example Euro/Dollar or Dollar/Yen.

Where is the central location of the FX Market?
FX Trading is not centralized on an exchange, as with the stock and futures markets. The FX market is considered an Over the Counter (OTC) or 'Interbank' market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network.

Who are the participants in the FX Market?
The Forex market is called an 'Interbank' market due to the fact that historically it has been dominated by banks, including central banks, commercial banks, and investment banks. However, the percentage of other market participants is rapidly growing, and now includes large multinational corporations, global money managers, registered dealers, international money brokers, futures and options traders, and private speculators.

When is the FX market open for trading?
A true 24-hour market, Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, then London, and New York. Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night.

What kind of trading strategy should I use?
Currency traders make decisions using both technical factors and economic fundamentals. Technical traders use charts, trend lines, support and resistance levels, and numerous patterns and mathematical analyses to identify trading opportunities, whereas fundamentalists predict price movements by interpreting a wide variety of economic information, including news, government-issued indicators and reports, and even rumor. The most dramatic price movements however, occur when unexpected events happen. The event can range from a Central Bank raising domestic interest rates to the outcome of a political election or even an act of war. Nonetheless, more often it is the expectation of an event that drives the market rather than the event itself.

The term Interbank is bit a misnomer its not actually a bank . It is electronic switching networks among large banks

 

[amarnath]

Hi all,

Forex trading can be 100% automated . Its my recent 100% automated forex trading result with safer leverage and MM based models . . If need more info contact me on YM or mail.

 

[beda]

thanks for all of u for wonderful info pl post more so that begineers like me in forex can learn a lot

 

[JSWE]

Good article

 

[nautilus]

Remember there is no broker / bank offers STOP LOSS gaurentee during economic releases and certain volatile conditions

I am sorry to disagree with you on this point, there is always bid/offer available to trade the FX market - it is also the most liquid market of all. The stop losses are always executed - may be sometimes with a slippage but one is not stuck in the market - the market always allows you out. I have never seen liquidity or bid/offers dry up in the FX market. Where as in the stock markets the liquidity can dry up so can Bids/Offers - especially in volatile conditions. During October 1987 market crash in the US, I had seen S&P 500 Futures Bids/Offer on IMM widen to 1500 basis points equivalent to US$ 7500. This has never happened in the major FX markets unless one decides to trade some esoteric currency.

Nautilus

 

[nautilus]

Hi all,

Forex trading can be 100% automated . Its my recent 100% automated forex trading result with safer leverage and MM based models . . If need more info contact me on YM or mail.

It would be very interesting to see the results with either brokerage or commission deducted!

Nautilus

 

[mohan.nj]

Dear all,

first of all I want to know who are the provider in forex trading. I have some info on refco. but there are a lot of procedural hurdles and you need to trade only thro' internet.

Refco claims many a things. based on your response and other inputs ( i.e., other than refco If find any other fellow offering fx service I will update).

By the way, their is an interesting book "the psychology of forex trading " but heavily priced 3686 rupees.

c u soon
mohan.

 

[amarnath]

It would be very interesting to see the results with either brokerage or commission deducted!

Nautilus

This is results from brokerage deducted already . In forex spread is brokerage