Forex Trading Company

Forex For Absolute Dummies

2006-07-07T22:07:00.000-07:00

by Joseph Plazo

Forex (foreign exchange) refers to the foreign currency exchange market, the world's largest financial trading market. Pass yourself as a forex expert with these buzz words:

•Bid – to buy
•Ask – to sell
•Liquidity – financial ease of transaction, i.e. cash
•Trading volume – the amount traded
•Bid/ask spread – the difference between the proposed buying price and the actual selling price
•OTC – over the counter
•Exchange rate – the difference between currency values; for instance, a Canadian dollar is valued at .86 of a US dollar
•Hedge funds – large mutual funds companies that control vast amounts of money and are able to manipulate the value of a currency through speculation
•Central bank – the national bank of a nation, which usually exerts control over the value of that currency

Forex trading is the investment in the currency of one nation. Multinational Corporations doing business across national boundaries find value in keeping their cash reserves in a variety of countries, and holding their funds in a myriad of ways. For example, a UK corporation may hold a percentage of its working capital in UK pounds, but if it does quite a bit of business in USA it may also maintain a percentage of its money in dollars, in US banks. Individual investors over the decades have discovered that there is profit to be made in investment and speculation in the currency markets.

Take the case during the 70's when the German DM swung rapidly in value. It was worth anywhere from 1.2 marks to the US dollar to 3.5 US marks to the dollar. When the mark was worth 2.5 it was beneficial to spend dollars buying marks, since the mark would buy more goods or services at that rate. As the mark bottomed out 1.7 to the dollar there was less incentive.

Surprisingly, the forex market itself is not unified. One can find many small forex markets specializing in trading various currencies. The most commonly traded currencies in forex speculation are the US dollar, the Australian dollar, the British pound sterling, the Japanese yen, and the European Euro. Currency values vary depending on the market in which an investor is speculating, so there is really no such thing as a single, unified dollar rate, but instead there are multiple dollar rates, which vary according to the market where the trade is occurring.

The major cities in which trades occur include New York, London, and Tokyo. It's a 24 hour process. When Asian trading ends, European trading commences, and when European trading ends, then American trading opens. Naturally, when American trading ends, it is time for Asian trading to open house once more… and so on.

Currently, the most actively traded currency is the US dollar, involved in 90% of all trades. This is followed by the Euro involved in 36% of all trades, then by the yen in 20% and the pound in 17%.

Our fastest rising currency in trade is the Euro, however the US dollar is still the favored anchor point-- and the currency watched so as to judge how others will react. Differences in value of currencies come from the current events. GDP growth, inflation dips, interest rate swings, budget and trade deficits, surpluses and other economic conditions all shift currency values. Investors, for this reason, follow the news very closely. There are 24 hour cable news channels and many web sites devoted to news that aid currency speculators.

The forex market is highly susceptible to rumors. In fact the central banks of countries frequently manipulated local currency value by sowing rumors about interest rate hikes and other economic propaganda that impacts the value of the domestic currency. When this news is false it is called a dirty float- and it dismays the market.

About The Author:
A master of manifestation to his associates, Joseph R. Plazo offers intense executive coaching so people can find jobs and build careers. http://www.xtrememind.com
http://jobcentralasia.com
http://www.powerconsultants.net

Source:

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Can you become a Forex Introducing Broker?

2006-06-29T10:35:00.000-07:00

Author: Fiorenzo Fontana

Any individual or company that has contacts with individuals or other companies who might be interested in trading forex online, either by themselves or through a forex broker can become a forex Introducing Broker.

Below are some typical examples of companies that can become successful forex Introducing Brokers (IBs). This list is not exhaustive, so if you don't see a description of your company type or your personal background, you can check out any forex broker online.

Independent Financial Advisers
Successful Forex Traders
Banks
Insurance companies
Advertising companies
Organisers of financial seminars
Estate agents
Sales Executives with interested* client base
Any business professional with interested* clients

*How do you know if your contacts are interested in the forex markets?

If your contacts are the kind of people who satisfy all or some of the following criteria, then the chances are that they might be interested in trading forex. And this means that you can earn commissions from introducing them to a forex broker:

Previous experience in trading online
Previous experience in investing
Have disposable income to trade
(usually above USD10,000)
Are interested in alternative forms of investment
Want to trade themselves
Want professionals to trade for them

There are few prospects that offer individual or commercial entrepreneurs more benefits than those provided by becoming an introducing broker in the online foreign exchange business. These benefits are driving more and more ambitious individuals and companies to offer their customers and contacts a direct route to trading currencies online and/or investing their money in professionally managed forex accounts.

Qualified businesses and individuals across the world take advantage of the rapid growth of the forex market via an introducing broker relationship. If you want to be one of them, read the section below on why you should become an Introducing Broker.

Below, I have listed just some of the advantages of becoming an Introducing Broker for an online forex brokerage:

Introducing Brokers - Why should you become one?

Your benefits
Provide your customers and contact with access to the freedom that comes from actively trading their own money online on secure forex trading platforms. Increase the number of investment and money-making opportunities you offer your clients and network, which in turn improves the scope and reputation of your own business and can lead to greater client retention levels.

You are paid a commission based on the trading volume of the clients you refer. For your clients, this doesn't mean that they pay more. You are remunerated exclusively by the forex broker out of his profit from your referred clients.

You can receive daily reports on the commissions you generate through the clients you refer to your forex broker. This enables you to monitor the growth of you new business online, 24 hours a day.

You can take advantage of the explosive growth in the demand for alternative investments by offering your high-net worth clients a managed forex account. By introducing clients to a managed forex account, you gain because their investments are being managed by professionals and this increases your reputation as a quality financial services provider.

It's easy to get started as an Introducing Broker. In fact, if you simply decide you want to introduce clients for a commission based on their trade volume (which is the most popular type of Introducing Broker agreement), then all you need is a relationship with a couple of forex brokers.

You can leverage the potential in your existing customer base or commercial relationships by constantly improving the level and depth of financial services you provide.

Your clients often gain better service from you (if you choose to manage your relationship with them directly. The reason for this is that most forex brokers are international and that means that they may not have the in-depth expertise or understanding of your clients specific needs as you do. This improves your service offering and assists in building client loyalty.

Your own Swiss bank account. A few forex brokers even provide Introducing Brokers with their own Swiss bank account where all commissions are paid. The advantages of having your own Swiss bank account are well known, but there are some great free guides to Swiss banking on the net.

Your clients' benefits
Your clients can trade forex whenever they choose. The forex market is the most liquid and most actively traded market in the world. This means that 24 hours a day from Sunday evening 22:00 CET until Friday evening 22:00 CET they can decide for themselves when they want to trade and when they want time off.

Your clients get free account management services to make their online forex trading even easier. All reputable forex brokers provide a complete back office (account management) system, free of charge to all clients.

Your clients can diversify their investment into online forex trading. More and more investors and traders choose to spread their risk by investing in a number of capital market products, such as stocks, forex, futures etc.

Your clients do not have to be investment wizards. Anyone can learn how to trade forex in a few hours. In fact, most forex brokers provide in-depth training in how to use their systems.

Getting started as an Introducing Broker
Make sure that the forex broker you choose to become an Introducing Broker for provides all the assistance you require to grow your new business. The best ones in the market will provide you with the support, materials and training you need so that you can promote their online currency services to your clients and contacts in the most informed and compelling way as possible.

About the Author:
Fiorenzo Fontana
http://www.forextrading-system.com - Forex brokers

Source: http://www.ex-designz.net

Technorati tags: Forex Broker,Forex, Forex Trading, Currency Trading, Forex Introducing Broker

Forex Trading - Understanding Commissions, Spreads and Trading Costs

2006-06-24T15:56:00.000-07:00

By Rich Cochrane

The forex market is quickly becoming one of the most popular markets for trading. Not only are the experienced traders looking to this market to maximize their trading returns, but many new, individual investors are now able to trade the Forex market - just as they do stocks and futures. More and more individuals are seeing Forex not only as a new way to diversify their portfolio, but are also finding that it is becoming the most profitable component of their investments. And that's because of the many advantages Forex offers over other markets like stocks or commodities. Here's what you will typically see advertized about Forex:
- Unparallelled liquidity. It is the largest financial market in the world by far. Almost $2 trillion being traded daily!
- Excellent leverage potential. Individual investors have access to leverage of 100:1 and even 200:1
- No Commissions (more on this later on)
- Low trading costs.

And yes, the Forex market really does offer all these advantages.

But the last two points above talk about costs, and that's what we'd like to focus on in this article. Like any trading, there are costs involved, and, while these may be much lower than they used to be, it is important to understand what those are.

Let's start by looking at stock trading, something that most of us investors are pretty familiar with. When trading stocks, most investors will have a trading account with a broker somewhere and will have investment funds deposited in that account. The broker will then execute the trades on behalf of the account holder, and of course, in return for providing that service, the broker will want to be compensated. With stocks, typically, the broker will earn a commission for executing the trade. They will charge either a fixed dollar amount per trade, or a dollar amount per share, or (most commonly) a scaled commission based on how big your trade is. And, they will charge it on both sides of the transaction. That is to say, when you buy the stock you get charged commission, AND then when you sell that same stock you get charged another commission.

With Forex trading, the brokers constantly advertise "no commission". And, of course that's true - except for a few brokers, who do charge a commission similar to stocks. But also, of course, the brokers aren't performing their trading services for free. They too make money.
The way they do that is by charging the investor a "spread". Simply put, the spread is the difference between the bid price and the ask price for the currency being traded. The broker will add this spread onto the price of the trade and keep it as their fee for trading. So, while it isn't a commission per se, it behaves in practically the same way. It is just a little more hidden. The good news though is that typically this spread is only charged on one side of the transaction. In other words, you don't pay the spread when you buy AND then again when you sell. It is usually only charged on the "buy" side of the trades.

So the spread really is your primary cost of trading the Forex and you should pay attention to the details of what the different brokers offer.

The spreads offered can vary pretty dramatically from broker to broker. And while it may not seem like much of a difference to be trading with a 5 pip spread vs a 4 pip spread, it actually can add up very quickly when you multiply it out by how many trades you make and how much money you're trading. Think about it, 4 pips vs 5 pips is a difference of 25% on your trading costs.

The other thing to recognize is that spreads can vary based on what currencies you're trading and what type of account you open. Most brokers will give you different spreads for different currencies. The most popular currency pairs like the EURUSD or GBPUSD will typically have the lowest spreads, while currencies that have less demand will likely be traded with higher spreads.

Be sure to think about what currencies you are most likely to be trading and find out what your spreads will be for those currencies. Also, some brokers will offer different spreads for different types of accounts. A mini account, for example may be subject to higher spreads than a full contract account.

And finally, because the spreads really are the difference between bid prices and ask prices as determined by the free market, it is important to recognize that they are not "guaranteed". Most brokers will tell you that there may be times during periods of low demand, or very active trading when the spreads widen and you will be charged that wider spread. These do tend to be rarer situations because the Forex market really is so large and demand and supply are generally quite predictable, but they do occur, especially with some of the lesser traded currencies. So it's important to be aware of that.

In summary then, when trading Forex, understand that the "spread" is truly your most important consideration for trading costs.

Spreads can vary significantly between brokers, account types and currencies traded. And small differences in the spread can really add up to thousands of dollars in trading costs over even just a few months.

So be sure to understand what currencies you are going to be trading, how frequently, and in what type of account and use those factors to help decide which broker can offer you the best trading costs.

About The Author

Rich Cochrane specializes in forex trading strategies and researching low cost trading alternatives. For more information on how to save on your forex trading and pocket more pips http://www.forexdiscountbroker.com

Article Source: http://EzineArticles.com/?expert=Rich_Cochrane

Technorati tags: Forex, Forex Trading, Currency Trading, Spread

Forex Broker Comparison Tool

2006-06-22T20:37:00.000-07:00

If you are trying to find out which of the forex brokers would best suit your needs, a useful online tool was created online at http://www.brokersmatrix.com.

It’s called BrokersMatrix and it allows you to compare the brokers active on the Forex market. Started on May 3, 2006, it lets you to compare, comment and rate the forex online brokers. You can make comparison on many points, such as leverage, spread, commission, and services; actually there are nearly one hundred points of comparison.

As of June 22, 2006, there are 42 Forex brokers available for comparison on the site.

BrokersMatrix is a very handy tool that you can use if you try to choose your broker according to your specific requirements and your style of trading. Some of the most important comparison criteria used are: minimum deposit, maximum leverage, spreads, number of currency pairs traded, availability and size of mini account, trading platform used, the country where your money is stored, the language spoken by the broker, and many more.

BrokersMatrix site also gives their users a number of options for interaction, such as: comment and rate your broker and view comments about a broker (the website is still in its infancy, therefore there aren’t too many comments and ratings yet). One of the most useful features is the one that allows the user to ask broker(s) to call you back, which can be the first test to assess the quality of the service. The brokers can contact you by email or phone.

A menu called "Regulation" lists the main regulation associations and commissions that regulate the forex trading industry, including CFTC and NFA (NFA’s search tool makes it possible to obtain important regulatory information about the brokers and their executives).

There are some other sources on the Internet that offer similar information, but the BrokersMatrix quietly became the front-runner, describing:
• 42 Forex brokers, including 8 brokers who also allow you to trade Futures,
• 7 brokers with bank secrecy option,
• 8 brokers using the MetaTrader platforms,
• 3 brokers who give you interest on capital

The BrokersMatrix’s advanced search tool provides plenty of useful information about each of the forex companies. For example, with regards to the forex trading platform, the following information is provided:
- name of the trading platform
- whether backtest is allowed
- if automate trading strategies are offered
- if mobile version is made available
- type of Operating System used
- whether Hedging is allowed
- if Sub account is allowed

With regards to forex banking issues, BrokersMatrix gives the following information (Yes/No): transfer to broker via bank wire, transfer to broker via check, transfer to broker via credit card, transfer to broker via Paypal, transfer to broker via e-gold, transfer to broker via e-bullion, interest on capital as well as what are the withdrawal fees and the account currency.

BrokersMatrix also offers brokers platform comparison tool, which currently features 3 platforms:
• MetaTrader 3
• MetaTrader 4
• TradeStation

Finally, the BrokersMatrix provides two more interactive tools – both for prospective traders looking for info on forex brokers and for those already involved in trading currencies; they are the Forum (this may become a very interesting place to visit…) and the newsletter - teasing the potential subscribers with “interesting discount from brokers” (it may be worth trying…).

Kudos to Vincent, the site’s administrator, for creating this website and offering a very useful tool for the forex trading community. There are very few bugs there, the site loads quickly and is easy to use. Very well done, Vincent!

Stan Hill

About the Author
Stan Hill is an online entrepreneur, forex trader, blogger and hockey enthusiast. Stan regularly blogs about forex at http://forex--trading--company.blogspot.com while listening to The Beatles music.

Technorati tags: Forex, Forex Trading, Currency Trading, Forex Trading Company

5 Steps To Success In Currency Trading

2006-06-20T19:28:00.000-07:00

Do you have what's needed to trade forex successfully?

In his interesting article, Sacha Tarkovsky describes 5 steps that will help you achieve the forex trading profits you desire. We highly recommend the article which is available here, but we want to list here the crucial elements:

Have The Right Attitude
Trade In Isolation
Use Right Method (catching and riding the big trends)
Leave Your Ego Behind
Know your Trading Edge

For More FREE info you can go to Sacha's website at http://www.wellingtoncr.com where you can also get a FREE Currency trader CD packed with 100 pages of wealth building tips and strategies.

VPForex

Technorati tags: Forex, Forex Trading, Currency Trading, Forex Trading Company, Forex Trading Psychology

Forex Trading Company

2006-06-20T16:42:00.000-07:00

Welcome to Forex Trading Company Blog!

Hi and welcome to our blog. Here you will find interesting stuff about companies involved in forex trading (currency trading). We will be providing useful information on forex brokers, forex data providers, forex software and platform developers and on companies offering forex trading signals and alerts. We will be reviewing here forex-related books, forex ebooks, courses, tutorials, tapes, CDs, websites, portals and more.

So, if you're looking for solid and unbiased information, new and advice, whether you're just looking for info on currency trading because you wish to start this fascinating income opportunity, or if you want to expand your trading knowledge and strategies, or even if you're a seasoned forex trader, we hope that you'll find something interesting to spend a moment with us. Please come here again and the best way to do it is to subscribe to our RSS feed (see the sidebar).

Thank you for your time,

VPForex

Technorati tags: Forex, Forex Trading, Currency Trading, Forex Trading Company