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Module 2 2008-02-16 10:08:00 How are foreign currenciesquoted and priced?Now let’s take a look at how foreign currencies are quoted and priced. Currencies are designated by three-letter symbols. The standard symbols for some of the most commonly traded currencies are shown below.EUR EuroUSD United States dollarCAD Canadian dollarGBP British poundJPY Japanese yenAUD Australian dollarCHF Swiss francCurrency pairs are often quoted as bid-ask spreads. The first part of the quote is the amount of the quote currency you will receive in exchange for one unit of the base currency (the bid price). The second part of the quote is the amount of the quote currency you must spend for one unit of the base currency (the ask or offer price). For example, a EUR/USD spread of 1.2170/1.2178 means that you can sell one Euro for $1.2170 and buy one Euro for $1.2178. This spread could also be quoted as 1.2170/78.Currency pairs are often quoted as bid-ask spreads. The first part of the quote is the amount of the quote currency you wil ...

Module 1 2008-02-15 15:12:00 What are foreign currency exchange rates? Let’s start with a definition of foreign currency exchange rates. Simply put, foreign currency exchange rates are what it costs to exchange one country’s currency for another country’s currency. For example, if you go to England on vacation, you will have to pay for your hotel, meals, admissions fees, souvenirs and other expenses in British pounds. Since your money is all in US dollars, you will have to sell some of your dollars to buy British pounds.Let’s assume that you have decided to take a trip to England. Before you leave, you go to your bank and buy $1,000 worth of British pounds. If you get 565.83 British pounds (£565.83) for your $1,000, each dollar is worth .56583 British pounds. This is the exchange rate for converting dollars to pounds.After spending a few days in England, you realize that £565.83 won’t be enough to cover all of your expenses. So you go to a bank in England and buy another $1,000 worth of British ...

Now you go to learn everything on forex 2008-02-15 15:09:00 You already have some information standards on forex and a little disorganized. Apartir of now you will have in the Forex Invested a Course on Forex. It does not lose. ...

Interest On Forex Trades 2008-02-13 14:58:00 One of the great things about Forex trading is your ability to trade using leverage, effectively borrowing sometimes as much as 1,000 times your capital to make a trade. But borrowing money for currency trading is exactly the same as borrowing money for any other purpose and you will have to pay interest on your loan. Currency transactions involve both buying and selling currencies however and this means that interest payments due on money which you borrow to fund a sale can be offset by interest earned on the currency you buy. If this seems a bit confusing we will take a look at an example in a minute but, first, let's take a moment to look at the subject of interest rates in general to see the wider picture as it affects the foreign exchange market. Central banks set interest rates to meet a country's monetary policy and interest rates raise or lower the cost of a currency. High interest rates will make it expensive to buy a currency and low interest rates will make a currency more ...

Pip Values 2008-02-13 14:54:00 A pip is the smallest movement that is possible in the price of one currency against and it is vital to be able to calculate pip values quickly and easily as it is the movement in prices which results in your profit or loss when trading. A pip is normally, but not always, 0.0001 or 0.01%. In other words, if a currency moves from a price of 1.7650 to 1.7655 it is said to move 5 pips. The easiest way to understand how to calculate pip values is to start by considering currency pairs which involve the US Dollar and we start by considering the situation when the US Dollar is the quote currency as in the case of JPY/USD, GBP/USD or CHF/USD. Here calculating a pip value is very easy as a pip will always have a value of $10. So, if while trading JPY/USD the market moves in your favor by 10 pips you will make a profit of $100. Let's see how this works. Consider a quote of GBP/USD is 1.9730. This means that 1 UK Pound is worth 1.9730 US Dollars. A standard InterBank lot size is 100,000 and whi ...

Fibonacci 2008-02-11 12:30:00 Fibonacci forex trading is the basis of many forex trading systems used by a great number of professional forex brokers around the globe, and many billions of dollars are profitable traded every year based on these trading techniques.Fibonacci was an Italian mathematician and he is best remembered by his world famous Fibonacci sequence, the definition of this sequence is that it's formed by a series of numbers where each number is the sum of the two preceding numbers; 1, 1, 2, 3, 5, 8, 13 ...But in the case of currency trading what is more important for the forex trader is the Fibonacci ratios derived from this sequence of numbers, i.e. .236, .50, .382, .618, etc.These ratios are mathematical proportions prevalent in many places and structures in nature, as well as in many man made creations.Forex trading can greatly benefit form this mathematical proportions due to the fact that the oscillations observed in forex charts, where prices are visibly changing in an oscillatory pattern, fo ...

Swing Trading For Profit a Live Example 2008-02-08 07:59:00 Swing trading is one of the best ways to make money in forex trading, it's also a lot easier psychologically than trend following.It's therefore a great way to trade for novice traders. Over the last few weeks we have looked at some live examples:Banked 4 profits, scratched one trade at break even and have one open. Let's look at it and another potential opportunity.First why is swing trading an easy way to trade?When we say is easy, we mean psychologically.You get in quick with low pre defined risk and you're normally out in 2 - 5 days with a good profit.This is much easier than long term trend following, in that you do not have to wait for months and see dips eat into your open profit.Long term trend following is highly profitable but requires a lot more discipline.We personally mix the two ways of trading to gain some diversification of style and smooth the equity curve.Swing trading basicsWe normally look for important chart support and resistance and trade contrary to it.We wa ...

Open and close position 2008-02-07 08:55:00 In Forex market you may buy or sell currencies. The objective is to earn a profit from your position. If you have bought a currency, for example, and currency appreciates in value, then you will earn a profit by closing your position. When you close your position and sell the currency back in order to lock in the profit, you are in actuality buying the counter currency in the pair. By trading currency pairs, one currency valued against another, a rate of worth has been established. After all, a country’s currency has value only relative to the currency of another country.So, what is the position?Position is the netted total commitments in a given currency. A position can be either flat or square (no exposure), long, (more currency bought than sold), or short (more currency sold than bought).In the Forex market, currencies are always priced in pairs; therefore, all trades result in the simultaneous buying of one currency and the selling of another. The objective of currency trading is ...

Your type of analysis 2008-02-07 08:55:00 There are two main, but at the same time confronting schools in forex analysis. They are the fundamentalists and technicians.There is no clear answer as to which is right. Sometimes it appears that the technicians make better picks. Other times it seems the fundamentalists are making the right call. One thing is certain, when one group of analysts is wrong the other will surely emerge saying, "We told you so." So, which is right for you? There are many potential answers to that question. Three variants of popular answers are:If you are a "long-term" Forex investor looking for companies with solid foundation, growth and income potential, the fundamentals may sway you.If you are a "short-term" Forex investor (Forex market trader) looking for companies who are "on the verge" of being discovered, fundamentals will be useful to you.If you are a "long-term" investor who is not as concerned about one company's basics because you will diversify to minimize risk, or you are a "short-term" inve ...

Starting your own trading 2008-02-07 08:54:00 The presented article is intended for those who just turned their eyes toward FOREX. Beginning traders who are still learning the basics of the foreign exchange market may also find something of interest here. While experienced traders won’t gain anything worth their time reading this article.Basically there are 4 steps which can be defined as “must do“ for those who wish to start trading FOREX. Though, their order is not particularly important, the more important part is their content, to which the great attention and responsibility must be paid.First step is finding a right FOREX broker which will be your main tool in trading. You can have a great strategy, good technical analysis skills or an outstanding intuition but you will eventually fail if you choose a bad broker. A good FOREX broker is one that will not still your money, will be doing real trading with your positions, supports your preferred deposit/withdraw methods and has fast and helpful user support service. It is n ...

Can Forex Scams Be Avoided? 2008-02-07 08:54:00 First, what is Forex: The FOREX or Foreign Exchange market is the largest financial market in the world, with an volume of more than $1.5 trillion daily, dealing in currencies. Unlike other financial markets, the Forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another.Second, What is a Scam: A confidence trick, confidence game, or con for short (also known as a scam) is an attempt to intentionally mislead a person or persons (known as the mark) usually with the goal of financial or other gain. The confidence trickster, con man, scam artist or con artist often works with an accomplice called the shill, who tries to encourage the mark by pretending to believe the trickster.Whenever there is an opportunity to make large amounts of money, there will be people who are eager to jump right in and start making money. And where there are people who are eager to get rich quick wi ...

Rookie Mistakes Can be Expensive In Forex Trading 2008-02-07 08:53:00 First what is Forex: The FOREX or Foreign Exchange market is the largest financial market in the world, with an volume of more than $1.5 trillion daily, dealing in currencies. Unlike other financial markets, the Forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another.Learning anything new can lead to mistakes, but making mistakes can be the natural part of the learning process. When learning to trade or invest in the Forex, mistakes can lead to lose of profits and can become expensive. A good investor will understand the market they are using for trading. Whether you are new or experienced, you can still make mistakes. There are common errors that many traders and investors make when trading on the Forex. With a little research, you can learn how to avoid common Forex trader mistakes and how to learn to move on.Using too much margin when trading or investing on the Fore ...

Trying Out a Forex Demo Account 2008-02-07 08:53:00 First what is Forex: The FOREX or Foreign Exchange market is the largest financial market in the world, with an volume of more than $1.5 trillion daily, dealing in currencies. Unlike other financial markets, the Forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another.The Forex, or foreign currency exchange, is all about money. Money from all over the world is bought, sold and traded. On the Forex, anyone can buy and sell currency and with possibly come out ahead in the end. When dealing with the foreign currency exchange, it is possible to buy the currency of one country, sell it and make a profit. For example, a broker might buy a Japanese yen when the yen to dollar ratio increases, then sell the yens and buy back American dollars for a profit.To determine if Forex trading is truly for you, trying out a Forex demo account is the way to go. It is a method used by thousa ...

Treasuries Rise on Concerns over Financial Markets' Turmoil 2008-02-07 08:52:00 The U.S. 10-year Treasuries kept on gaining on speculation that central banks will fail to restore confidence to financial markets and keep economic growth from slowing.Government debt also rose as Morgan Stanley, the second- biggest U.S. securities firm, reported a fourth-quarter loss after a $9.4 billion write-down on mortgage-related investments.Ten-year Treasury yields fell 4 basis points to 4.08 percent. The price of the 4 1/4 percent security due November 2017 rose about 1/4, or $2.50 per $1000 face amount, to 101 11/32 and the Two-year yields fell 5 basis points to 3.13 percent.The TED spread, or the difference between what the U.S. government and banks pay for three-month loans, rose for the first time in six days, by 4 basis points to 1.93 percentage points, compared with 35 basis points at the start of the year.U.S. mortgage applications fell last week by the most since 2004. The Mortgage Bankers Association's index tumbled 20 percent to 653.8. The group's purchase index fe ...

Banks Heavily Exposed to Mortgages 2008-02-07 08:52:00 Right now banks in the USA -- as a total percent of their assets -- are more or less about as heavily exposed to mortgages as they have always been.Further more, banks are holding a tremendous amount of commercial real estate loans.The F.D.I.C. reported last year that more than 50% of all the banks in certain regions in the southeast and west had exposure to commercial real estate loans that exceeded their total capital by 300% or even much more!The total amount of bank capital in the U.S.A. is just over $ 1.2 trillion while more than 12 trillion in real estate loans exist, meaning that a 10% to 15% loss on those loans would translate into the complete bankruptcy of the US banking system ... !Well this is a crisis of solvency …Not liquidity!Recently the Federal Reserve has agreed with certain European Central Banks to provide tremendous new sources of liquidity to the banking system.The Central Banks will allow specific big banks to trade in their huge piles of uncertain loans for ...