Global Forex Trading 02

You can work from anywhere in the world

Due to the fact that the markets are available to everybody 24 hours a day, with internet connection, your laptop, computer, or even 3G enabled cell phone, one can actually trade from anywhere in the world.
The markets are open 24 hours a day

Round the clock trading gives the trader the opportunity to trade within any time zone around the world.

The currency market is a 24-hour market. As a trader, this allows you to react to favourable/unfavourable events by trading immediately. It also gives traders the added flexibility of determining their trading day.

You can be independent from routine and not answer to anybody.

Largest market in the world

If you add all the volume on all the stock exchanges in the world, it would still not get close to the volume on the Forex markets. Volume ensures that a trader will never be stuck with a position – if you want to buy there will be sellers and if you want to sell there will be buyers.

In excess of 3 trillion USD gets traded on a daily basis, this is more than all the other speculative markets put together and with more than 120 currency pairs available for trading daily, it has a huge potential for day traders.

Limited infrastructure required

You only need your computer, set–up with the appropriate software and the necessary training to conduct your business. No offices and other costly infrastructure stretching your cash flow to the extreme are required.

Little or no staff required

In this business it is predominantly you and your computer and you have no staff, no labour problems, no cash flow planning, no salaries and wages, to be concerned about.

No stock

No business can operate without stock be it production or even stationery stock, this in itself is a huge expense to keep and protect and many hours are spent to control and check your stock... now you can conduct a business without these expenses.

No theft and shrinkage

No losses to be concerned about and investing huge amounts of money to protect yourself against potential losses from theft or shrinkage.

Free and user friendly software

The trading software with charting is Windows based and you only need to click on an icon to activate the desired function.

Non- Simulated Demo trading account

With this account you will be in a position to trade on the real money markets using demo money. You will see real movements in the market and be able to trade them without risking real money.

Professional Training and On-going Support

FREE state of the art training presented in 10 online modules to all traders opening a live account.

Global Forex Trading

The U.S. dollar is gaining against the sterling and the euro in forex trading today. High beta currencies are losing out as risk aversion rises and investors look for safety in the U.S. dollar.

Rate decisions in the euro zone and in Britain are no surprise: Both the ECB and the BOE decided to keep things the same. The situation has not improved enough for higher interest rates, and lower interest rates would send the message that panic is in order.

As a result of troubles in the euro zone, the euro has reached multi-month lows in forex trading. Greece is the dominating factor. For the sterling in forex trading, the problems are related to the massive amounts of public debt. After watching Greece go down, there are concerns that Britain could be approaching that point.

In any case, risk aversion is high, and the U.S. dollar is gaining in forex trading on the currency market. Dollar bulls are in control, and likely to remain so until the issues in Europe are worked out.

FOREX Pros

Just like futures and stock speculation, a FOREX trader has the ability to control a large amount of currency by putting up a small amount of margin. However, the margin requirements that are needed for trading futures are usually around 5% of the full value of the holding, or 50% of the total value if you are trading stocks. One of the FOREX pros is the margin requirements for FOREX are about 1%. For example, the margin required to trade foreign exchange is $1000 for every $100,000. This can be a very profitable way to trade, but it's important to fully understand the risks that are involved.

When you trade in futures, you have to pay exchange and brokerage fees. FOREX is commission free, a much better scenario and another FOREX pro. Currency trading occurs on a worldwide inter-bank market that lets buyers be matched with sellers in an instant. But even though you do not have to pay a commission charge to a broker to be matched up with a buyer or seller, the spread is usually larger than it is when you are trading futures. And the spread is where the brokerage makes their money.

For example, if you are trading a Japanese Yen/US Dollar pair, a FOREX trade would have about a 3 point spread (worth $30). Trading a JY futures trade would likely have a spread of only 1 point (worth $10), but you would also be charged the broker's commission on top of that. This price could be as low as $10 for self-directed online trading, or as high as $50 for full-service trading. However, this is generally all-inclusive pricing. It’s a good idea to compare both online FOREX and your specific futures commission charges to see which commission is the greater one.

This may seem complicated, and frankly, it is a bit. The FOREX market is a technical market, but if you are willing to take the time to understand the workings of the market as well as the FOREx pros and apply good trading discipline, you will realize substantial profits.

Trading platforms

Among the main features of on-line trading resources that modern traders and investors demand are practicality, convenience, mobility, and quality. Broco clients enjoy all of these, thanks to the variety of trading terminals, which our company provides to help them access major financial markets around the globe.

Broco provides 4 trading terminals — to keep track of and trade a multitude of financial instruments in diverse financial markets. These provide virtually unlimited opportunities for profitable trading. This wide range of products is proof positive that the Broco understands the needs of traders and is faithful to its slogan "Made by traders for traders".

What is the Foreign Exchange Market

The foreign exchange market is the (market)place where different currencies are traded for one another.

As such, it is held to be the biggest financial market in the world, and one which is closest to the ideal of ‘perfect competition’ held by economists the world over.

The traders in this market include currency speculators, banks, central banks, governments, multinational corporations, and other financial organizations.

Foreign Exchange Market: Features

The foreign exchange market or the forex market is characterized by:

• Huge trading volumes
• 24 hour trading
• Geographical Diversity
• Liquidity
• Large variety and number of traders

The trading volumes of the forex market exceed billions of dollars and the market is open 24 hours a day because currency is traded all throughout the globe. This geographical diversity is the reason that a large variety of traders exist in the foreign exchange market today. Also adding to this diversity is the capability of different platforms such as Internet trading, to create a diverse trader base in the market.

Of course, the fact that trade in this market consists of currency or foreign exchange is bound to create a very high amount of liquidity in this particular market.

The main feature of this market is that there is no central marketplace for the trade of foreign exchange. As such, the trade is carried out OTC or ‘Over The Counter’.

Depending upon the kind of foreign exchange or currency instrument being traded, and the kind of trade being conducted, the prices vary. For example, the price for buying currency notes would be different from the price for buying checks. Similarly a buy transaction exchange rate will differ from a sell transaction exchange rate.

The Top 5 currencies which are traded in the foreign exchange market are:

• United States Dollar (USD)
• Eurozone Euro (EUR)
• Japanese Yen (JPY)
• British Pound Sterling (GBP)
• Swiss Franc (CHF)

Currency rates are always expressed in terms of another, more popular or stable currency. For example, the exchange rate of the Indian Rupee is always expressed in comparison with the United States Dollar.

Factors Affecting Foreign Exchange Currency Market Trade

Due to its particular features, foreign exchange rates and trade in the foreign exchange market are primarily the result of the demand and supply functions of currency.

Other than this point of view, the forex market is also affected by factors which can be broadly classified into:

• Political Factors
• Economic Factors
• Market Psychology

Political conditions of a country can affect that country’s currency rates. Growth and economic prosperity can positively affect the currency rates, while political upheaval like civil war can negatively affect the currency rates of that country.

Economic factors include things such as the budget deficit or surplus conditions of that country, the balance of trade situation, levels of inflation and the general trend of economic growth in that country.

Market psychology includes the susceptibility of the forex market to rumors, perceptions of the market regarding the safety of a particular currency, and the definitive long term trends of a currency in the market.

All these factors contribute towards the currency rate of a particular country to rise or fall.

Types of Forex Financial Instruments

These are the different types of financial instruments or trading systems that are followed commonly in the foreign exchange market. Let us have a quick look at them.

Spot

In this kind of trade, the transaction has a 2-day delivery date. This is a direct exchange between two currencies and often involves cash and does not include any interest. This is by far the most voluminous trade that is carried out in the forex market.

Forward

In this kind of trade, currencies are exchanged on a future, agreed upon date. The seller and the buyer agree upon a future date on which to exchange their currencies with each other. The currency is then exchanged at the rate of exchange prevalent on that day.

Future

This is similar to the Futures trade which takes place in the stock market. This involves standard contracts which often have maturity dates. The contract will state how much currency is to be exchanged on which date and at which rate. There are often special exchanges for these trades. The contracts also often include interest costs.

Swap

This is a very unique type of a forex transaction. In this, two parties decide to exchange currencies with each other for a pre-agreed length of time and then agree to reverse the transaction at a future date.

Option

This again is similar to the Options trade in the stock market. In this transaction, the owner of the transaction can exchange currency at a pre-agreed rate on a pre-agreed date. This is an option, a right, but not an obligation of the Option owner.

In conclusion, we can say that the foreign exchange market is thus a very important aspect of the measurement of the financial situation of a particular country in the global marketplace.

Stock Market

There are many small players that join the bandwagon of stock market investors every day. They trade successfully, armed with research and knowledge. No different from any other trading ground, the stock market too, can be conquered. The transactions and the outcome of the market are unique in a sense that they can be conducted via online trading or in real time. It is very important though to know how to start investing in the stock market before joining the fray.

Some Stock Market References:

Stock: Stock refers to a share in the profit. Stock trading involves 'buying into ownership' of a company. Stock is also referred to as equity or shares.

Investor: An investor is the owner of a particular company's stock. He has 'claim', in however small a proportion, to all company assets. The investor shares the company's earnings.

Stock certificate: The stock certificate represents the stock purchased and defines the return on investment. Offline, the certificate is a fancy document, while online it is a display available at a click on the mouse.

Dividend: This is a distribution of the owned portion of a company's earnings. It is commonly quoted in terms of a currency amount per share.

Common stock: Common stock represents ownership in a company and claim on a portion of profits. It yields higher returns in the long run.

Preferred stock: It guarantees a fixed dividend forever. In event of liquidation, preferred stock continues to be paid off.

How to Start Investing in the Stock Market:

Assimilate information: The stock market is just like any other trading arena. It is unique in application and hence, it is very important to get yourself educated on the basics and the terms and abbreviations used. You should use every resource to get acquainted with the roles of other players on the field and understand how one enriches the other. Set time aside to read and research about stocks, stock exchange and market trends. Inquire about seminars, symposiums and online resources.

Set financial goals: Like everything else in life, stock investing too can lead to 'aimless wandering' if there is no short and long term financial goal in place. You could look up any of the stock-picking strategies like options trading that are easily accessible to set your own goals.

Invest in market-specific knowledge: Indulge in preliminary reading of annual and quarterly reports. Look up dedicated documents accessible from the Securities and Exchange Commission. Once you get acquainted with the lingo and analysis, you will be better equipped to meet the market challenges.

Invest small and on familiar turf: It is very important to invest small in the beginning. Like any other fiscal arena, don't put all the eggs in one basket. Buy stocks to diversify. Invest primarily, in those companies that you are familiar with. This will add to your level of confidence while interacting within the 'ring'.

Compare and analyze research: It is important to conduct stock research and assimilate and analyze the performance of successful companies dealing in mutual-funds and stock. The profits could be yours if you follow similar trends and identify their success strategy.

Study the charts: Compare and study the charts relevant to your investment in the stock market. This enables you to home your investment skills by identifying upscale industries and major foreign investments.

Focus on the long term financial goal: Achieve short term, but don't let the long term financial goal out of sight. In order to achieve both, it is important to indulge in goal setting and be patient with stocks that are slow in making it to the charts and save on commissions. The latter can be achieved by making optimum use of discount brokerages.

The stock market can be a roller-coaster ride if you don't tread with caution. Use the three R's - Research, Review and Revise, for success on this turf.

Forex Is

Foreign exchange market or Forex is the market for buying and selling currencies. Currencies from all over the word can be traded in Forex which is an OTC (over the counter) market. The Forex market is loosely regulated by the Commodity Futures Trading Commission (CFTC). The National Futures Association (NFA) has regulatory authority over retail brokers and market makers. Forex, the most liquid market in the world operates round the clock.

Who are the Market Participants? Why do they trade ?

Governments and Banks:Governments and central banks of various countries deal in the forex market with the intention of maintaining their foreign exchange reserves. Many a times governments buy and sell currency with the intention of achieving a favorable balance of payment (BOP) situation. For instance if a country is interested in increasing its exports, it might sell its currency in forex market. This would increase the supply of the currency. An increase in supply would result in currency depreciation. Once the currency depreciates, exports increase; making the current account balance favorable and the BOP satisfactory. Since governments and central banks have unlimited authority and access to money, they can exercise significant influence on the direction of the market.

Business Firms: Firms deal in the forex market mainly in order to hedge against unfavorable exchange rate movements. For example, a firm in the U.S. engaged in the business of supplying corn to Europe would receive payments in EUR. Suppose EUR depreciates, the U.S. based firm would suffer. This is because the firm can now buy fewer dollars with the euros. In order to avoid this situation the firm can enter into a future contract to lock in a favorable rate at which euros can be exchanged for dollars. This process is known as hedging.

Banks and Financial Institutions: Banks and other financial institutions also participate in the forex market. Banks profit from the bid-ask spread. They deal in a particular segment of the market known as the interbank market. In this market, banks who have credit relations with each other indulge in trading currencies. The size of the bank in monetary terms would determine its credit relation and its importance in the interbank market. Individuals who need to exchange currency can approach their local banks.