FOREX BROKER REVIEW: 2009

Thursday, January 8, 2009

Obama plan helps lift global stock market gloom

Obama stimulus plan helps lift some global stock market gloom amid grim US retail news

LONDON (AP) -- World stock markets ended mixed on Thursday after President-elect Barack Obama made an urgent pitch to Congress to back his plan to resuscitate the U.S. economy.

While Asian and European markets ended in negative territory, broad U.S. stock indexes posted gains, as did most markets in Latin America.
Though Obama warned that the economic situation would likely get worse before it gets better, he said his plan to cut taxes and pump billions into the U.S. economy would help limit the depth and length of the recession. It was his highest-profile pitch for the plan, which is expected to total nearly $800 million.

"The message is just going down well (in the markets)," said Howard Wheeldon, senior strategist at BGC Partners in London.
"There is a belief that there's something about this man and something about this plan," he added.
Those hopes helped European markets erase most of their earlier losses, which had been generated by mounting concerns about global economic growth as leading U.S. retailers revealed poor sales figures.
The FTSE 100 index of leading British shares closed down only 2.14 points at 4,505.37 while Germany's DAX slipped 57.56 points, or 1.2 percent, to 4,879.91, also off its session lows. The CAC-40 in France was 21.76, or 0.7 percent, down at 3,324.33.
U.S. stocks ended mostly higher, also boosted by an announced deal that would help prevent more mortgage foreclosures. Democratic lawmakers reached an agreement with Citigroup Inc. on a plan to let bankruptcy judges alter home loans in an effort to prevent foreclosures.
The Dow Jones industrial average fell 27.24 points, or 0.31 percent, to 8,742.46, but broader stock indicators advanced. The Standard & Poor's 500 index rose 3.08, or 0.34 percent, to 909.73, and the Nasdaq composite index rose 17.95, or 1.12 percent, to 1,617.01.
Nevertheless, stocks remain on the defensive following a healthy rally in the run-up to the 2008 year-end and the early sessions of 2009, as investors grapple with grim economic news.

Bad news was the story of the day earlier Thursday following a raft of dismal retail sales reports in the U.S. Among the many retailers that reported steep sales declines were Sears Holdings Corp., which operates Kmart and Sears stores, luxury retailer Saks Inc., Gap Inc., and Abercrombie & Fitch Co. But the biggest surprise came from Wal-Mart, the world's largest retailer, which posted a smaller sales gain than had been expected by Wall Street and cut its fourth-quarter earnings outlook.
In Latin America, Brazil's Ibovespa index resumed its 2009 rally, ending up 2.9 percent at 41,991. On Wednesday the Sao Paulo market dropped 3.5 percent, snapping a six-session winning streak.
Elsewhere in the region, Argentina's Merval added 2.2 percent to end at 1,192 and Chile's IPSA finished up 0.3 percent at 2,486. In Mexico, where the economy is closely bound to the U.S., the IPC index lost 0.7 percent to 21,955.

Earlier, every major market in Asia fell, marking an end to a New Year's rally.
Stock market analysts said there's been a noticeable change in market sentiment over the last 24 hours or so as investors took heed of the warnings and the likelihood that Friday's closely watched U.S. non-farm payrolls data for December may be particularly grim.

Neil Mackinnon, chief economist at ECU Group, said the reaction to Friday's jobs data will be key to see if the markets can soldier on.
"If it's a bad report and equities finish on a positive tone, that will be a very encouraging sign for markets, but if it's really bad and equity markets slump, it will be challenging for markets for the rest of the quarter," he said.
Earlier in Asia, Tokyo's Nikkei 225 stock average lost 362.82, or 3.9 percent, to 8,876.42, snapping a seven-day winning streak as the yen traded higher. Hong Kong's Hang Seng Index fell 571.55 points, or 3.8 percent, to 14,415.91.

South Korea's Kospi shed 1.8 percent, while Australia's benchmark dropped 2.3 percent and Taiwan's key index lost 5.3 percent. India's market, which plunged Wednesday after the chairman of major outsourcing company Satyam Computer admitted doctoring the firm's accounts for several years, was closed for a holiday.
In the oil market, light, sweet crude for February delivery fell 93 cents to settle at $41.70 a barrel on the New York Mercantile Exchange, a second day of declines after the U.S. government released more disheartening economic data and another inventory report suggested further erosion in energy demand. On Wednesday, prices tumbled more than 12 percent in the largest single-day percentage decline since September 2001.
The dollar, meanwhile, fell across the board after the Bank of England cut its key interest rate to a record low, but not as low as some traders expected. The British central bank cut its rate by half a percentage point to 1.5 percent, the lowest level in the bank's 315-year history. The British economy has been battered by a housing crisis and a string of failed retailers.
The euro rose to $1.3725 in late afternoon trading in New York from $1.3614 late Wednesday, while the British pound climbed to $1.5228 from $1.5132. The dollar also fell to 91.40 Japanese yen from 92.65 late Wednesday, and dropped to 1.0930 Swiss francs from 1.1026.

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Finding a new job becomes harder as layoffs mount

Finding a new job becomes harder as layoffs mount; unemployment expected to rise further

WASHINGTON (AP) -- The number of laid-off workers who are continuing to draw unemployment checks jumped more than expected to 4.6 million at the end of December and is likely to keep climbing this year -- fresh evidence that people are finding it increasingly difficult to get a new job amid a deepening recession.
The Labor Department's report Thursday also said first-time applications for jobless benefits dropped to 467,000 last week. But economists largely described that decline as a distortion, reflecting the government's difficulty in making seasonal adjustments over the holiday period. Even with the dip, the figure still signaled trouble in the labor market. A year ago, initial claims stood at 330,000.
Persistent economic woes -- housing, credit and financial crises -- along with a flurry of layoffs announcements in the opening days of 2009 all point to another terrible year for jobseekers, economists said.
Job hunter Barbara Slavin of Los Angeles knows that frustration.
"Many of the jobs I applied for I was qualified for and didn't get them," laments Slavin, 67, who was laid off last month as an executive assistant for a local Girl Scouts chapter. "I got a lot of energy. I like to work, and I don't know anybody who can live on Social Security alone."
She has worked a variety of places over the years, including a catering kitchen, a corporate newsletter and a software company.
The government's report showed that the number of people continuing to collect unemployment benefits rose by a sharp 101,000 to 4.6 million for the week ending Dec. 27, the most recent period for which that information is available. It was worse than the 4.5 million level of claims that economists had expected.
That increase left continued claims at the highest since November 1982, when the country was emerging from a deep recession, though the labor force has grown by about half since then. A year ago, this figure stood at nearly 2.7 million. The increase underscored the painful deterioration that has occurred in the jobs market.

"Workers getting laid off are not going to get hired any time soon," said John Silvia, chief economist at Wachovia.

Some economists believe the number of people drawing unemployment benefits could rise as high as 5.5 million this year -- even if a new government stimulus package is enacted.
President-elect Barack Obama called for a bold approach to revive the moribund economy.
"I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible," he said Thursday, the fourth straight day he talked about the economy, the No. 1 concern of most Americans.
"If nothing is done, this recession could linger," Obama warned. "The unemployment rate could reach double digits."
With employers throttling back hiring, the unemployment rate is expected to jump from 6.7 percent in November to 7 percent in December, which would be the highest in 15 1/2 years. The government releases that report Friday.
Obama, who takes over Jan. 20, is championing a massive package of tax cuts and government spending that could total $775 billion over two years. With add-ons by lawmakers, the package could swell to $850 billion, his advisers say.
With jobs disappearing, shoppers held tight to their wallets and pocketbooks at the end of 2008. The Federal Reserve said Thursday that consumers cut back on their borrowing on credit cards, and for such things as auto loans, at an annual rate of $7.94 billion in November, the biggest decline in 65 years of record keeping.

And retailers on Thursday reported dismal sales figures for December. Even Wal-Mart Stores Inc. finally buckled under the pressure of the sinking economy, with its sales rising less than analysts had expected. Among the many retailers that reported steep sales declines were Sears Holdings Corp., which operates Kmart and Sears stores, luxury retailer Saks Inc. and Gap Inc.
Consumers and companies are folding under the forces of the collapsed housing market, a global credit crunch and the worst financial crisis since the 1930s. The recession, which started in December 2007, already is the longest in a quarter-century.

"Only government can break the vicious cycles that are crippling our economy -- where a lack of spending leads to lost jobs, which leads to even less spending," Obama said.
This week alone, drugstore operator Walgreen Co., managed care provider Cigna Corp., aluminum producer Alcoa Inc., data-storage company EMC Corp. and computer products maker Logitech International all announced major layoffs to cope with a recession that has just entered its second year.
Pink slips are piling higher as companies scramble to cut costs even deeper. Electronic unemployment filing systems have crashed in at least three states in recent days due to the crush of Americans seeking jobless benefits.
For all of 2008, employers likely slashed payrolls by more than 2.4 million. That's based on economists' forecasts for a net loss of 550,000 additional jobs in December, as well as the job losses already reported every month last year by the government. Some, however, think the number of jobs cut last month will be higher -- around 600,000 or 700,000. That information also will be out Friday.
If the conservative 2.4 million estimate of net payroll reductions for 2008 proves correct, it would mark the first annual job loss since the previous recession in 2001. It also would be the worst year of job losses since 1945, when employers slashed nearly 2.8 million jobs, though the number of jobs in the U.S. has more than tripled since then.
On a more upbeat note Thursday, rates on 30-year mortgages this week fell to a new record low of 5.01 percent, a dose of good news for prospective home buyers -- if they can manage to get a home loan.

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Mich. expects deep budget cuts even with fed help

Gov. Granholm expects deep cuts to Mich. budget even with help from economic stimulus package

LANSING, Mich. (AP) -- Michigan Gov. Jennifer Granholm was reassured Thursday when she heard President-elect Barack Obama unveil his economic stimulus plan, but warned the federal help won't save the state from deep budget cuts.

In his comments at George Mason University in Fairfax, Va., Obama made an urgent pitch for a mammoth spending proposal to prop up the failing national economy.
The situation is even more dire in Michigan, which has the nation's highest unemployment rate and a domestic auto industry struggling to survive. The state treasurer and directors of the Senate and House fiscal agencies meet Friday morning to estimate how much less tax revenue Michigan will bring in than expected because of the deepening recession.

Granholm expects the news to be grim. Her administration in February will put out a proposal for next's year's state budget, and economists estimate it will have to be hundreds of millions of dollars less than the current spending plan. Granholm said last month that does not plan to raise taxes during the final two years of her term.
"I believe that every aspect of the budget is going to see cuts. Every aspect," the governor warned in a Thursday phone call to The Associated Press from Virginia, where she had gone to hear Obama unveil his stimulus plan.
"Even with the excitement that this recovery and reinvestment plan generates, it's not going to totally fix the problem for state budgets across the country," she said. "It's not a budget-fixing plan. It's an investment plan for people."
Granholm, a member of the incoming administration's transition economic advisory board, has pinned her hopes for a state recovery on the development of new alternative technology and alternative energy jobs, such as the manufacturing of car batteries to power future plug-in hybrid cars and wind turbines that can replace existing power sources.

She said Thursday the help that Obama wants to provide in the way of tax cuts and investments in alternative energy will help her achieve that goal.

"I think he's going to make a significant commitment to creating jobs in that sector," she said. "The idea of putting people to work and reducing our dependence on foreign oil, and energy efficiency, that's sort of one sector of jobs that would be created."
Obama's plan to invest construction money in schools and university buildings and roads and bridges also will help Michigan, as will his plans to put more money into worker retraining and health care programs for the poor, Granholm said.
Michigan can't count on that help until a stimulus package gets through Congress and onto Obama's desk for his signature. But the governor was heartened by Obama's decision to offer incentives to create jobs, especially environmentally friendly ones.
"All of that job creation investment is going to be extremely beneficial to us as we try to diversify" away from the auto industry, she said. "I believe firmly that this will create jobs in Michigan this year if it's passed quickly."

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Venezuela inflation topped 30 percent in 2008

Central bank: Inflation in Venezuela reaches 30 percent in 2008

CARACAS, Venezuela (AP) -- Venezuela's annual inflation climbed to 30.9 percent last year -- far above the government's target of 19.5 percent, the Central Bank reported Thursday.
Prices continued their upward surge in Venezuela last year even as economic growth slowed to 4.9 percent, down from 8.4 percent in 2007 and the slowest expansion since 2003.
Monthly nationwide inflation rose by 2.6 percent in December, rising from 2.3 percent in November as consumers increased spending during the holiday season, the Central Bank said.
The government hopes to cut inflation by half this year, but analysts say that lofty goal will be difficult to reach if public spending is not drastically reduced. President Hugo Chavez has vowed not to cut heavy spending on social programs that have made him popular among the poor.

"It's unlikely that the government is going to make important spending cuts," said Pavel Gomez, an economist at the IESA business school in Caracas.

Venezuela relies on oil sales to provide nearly half the government's budget and 94 percent of exports. But the drastic falls in oil prices are putting a pinch on Chavez's spending ability.

Some analysts expect Chavez may eventually be forced to devalue the currency, the bolivar, which is now fixed at 2.15 to the dollar. But Gomez believes the government will first try to introduce new taxes.
"If oil prices remain below $45 during all of 2009, the government is going to be thinking about a devaluation at the end of the year," he said.
A devaluation would allow officials to squeeze more bolivars out of each petrodollar, but the measure also would boost what already is the highest inflation rate in Latin America.

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Ventas Closes on Sale of Four Seniors Housing Assets to Benchmark

CHICAGO--(BUSINESS WIRE)--Ventas, Inc. (NYSE: VTR - News) (“Ventas” or the “Company”) said today that it has closed on the sale of four seniors housing assets to affiliates of Benchmark Assisted Living (collectively, “Benchmark”) for an aggregate sale price of $58.7 million. The assets are located in Massachusetts and contain 403 units.

The purchase price represents an 8.5 percent capitalization rate on cash rent. The sale was made pursuant to a purchase option that Benchmark held, which was in place prior to Ventas’s ownership of the assets. Prior to the sale, Benchmark was the tenant in these four seniors housing assets. Ventas expects to record a gain of approximately $11 million on the sale.

“Ventas continues to generate additional liquidity in this difficult capital market environment,” Ventas Chairman, President and Chief Executive Officer Debra A. Cafaro said. “We continue to enhance Ventas’s financial strength and flexibility to achieve the dual aims of managing successfully through a protracted downturn and positioning the Company to take advantage of opportunities when circumstances warrant.”

Net cash proceeds to Ventas of $20 million will be used to pay down debt or for general corporate purposes. Benchmark assumed $38.8 million of existing mortgage debt in the transaction.

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Wednesday, January 7, 2009

Forex trading rules for beginers III

Mistakes are unavoidable, but learn from mistakes and do not repeat it

Mistakes are unavoidable, please do not blame yourself, the important thing is to learn from mistakes, avoid making the similar mistake again, the faster you learn to accept loss and remembers the lesson, the days of profit making will be much more closer. Moreover, must learn to control emotion do not be proud after making profit, also do not feel depress after losing money. During Forex trading, the lesser the emotion, the more clearer you can see the market and make the right decision. Forex traders must face the reality calmly, Forex traders must understand that they will not learn from profit taking but they will only learn from loss. After understanding the reason behind every loss, this means that you are approaching the profit making path, because you had found the correct direction.

Oneself is the biggest enemy
The biggest enemy of a Forex trader is oneself - greedy, irritable, the out of control mood, and so on, is very easy to let you neglect the market trend which causes the wrong trading decision. Do not do trading because of bored or it has been a long time of none trading, there is no specific rule saying that a Forex trader must do how many tradings within a period of time.

Record the trading details
Record all the trading details, whether there is certain news or other reasons that influence you to trade, after the trade record and analyze the result of the profit and loss. If the result of the trading is profitable, this indicates that your analysis is correctly, when such similar situation appear again, your trading records will be helpful for you to rapidly makes the correct trading decision; wherelse the loss trading record will help you from making the same mistake again. Forex traders could not remember the history of every trading, therefore record is helpful in enhancing your Forex trading skill and also to look for mistakes.

Follow the trend, never against the trend
Remember the Forex market ancient general rule: Settle the position when it starts to loss, put as long as possible when it is profit making. Another important rules is do not let loss happen when it is making profit, when there is reverse trend in the market, it is better to make profit during the profit making situation then to settle position at the non-profitable situation.

Do not eagerly enter the Forex market after making loss

During the loss situation, do not eagerly open a new reverse market position in order to recoup from loss, this will only cause the situation to become worse. Only when you have agreed that your anticipation and decision in the past was completely wrong, then only you settle the old position and start a new reverse market position. Do not play with the Forex market through guessing, it is better to loss the opportunity then losing money.

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Forex trading rules for beginers II

Use stop loss to reduce risk

In Forex trading, Forex trader must be able to afford taking loss, using the stop loss will prevent any further loss, the affordable loss depends on the account available margin situation. If there is a stop loss, Forex traders should not feel upset because he or she has prevented the loss from getting worse.
Act according to own ability
It depends on the margin in the account to decide the trading volume. Generally, all combine trading position should not surpass 10% the account margin based on this rule. It is not wise to over trade, is very easy to have the loss out of control.

The account margin must be sufficient
The lesser the trading margin, the risk will become bigger, therefore must avoid letting the account margin left only suffice 50 undulations levels, such account amount does not allow any mistake to happen, but, even a well-experienced Forex trader could also make mistakes.

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Study. Read financial news, personal-finance magazines, corporate annual and quarterly reports, proxy statements, registration statements and prospectuses.

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Develop goals and strategies for meeting your goals and for picking stocks and other investments. Ask for professional advice in these areas if you are uncomfortable.

Step3
Diversify. Avoid putting large portions of your portfolio in a single stock or industry.

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Take advantage of tax breaks. Your employer might offer a 401(k) plan. If not, you might be able to set up an Individual Retirement Account or, for self-employed people, a Keogh plan.

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Buy stocks that you will want to keep for three to five years. Remember that "good" stocks at unrealistically high prices are a bad buy.

Step6
Invest in what you know. Conversely, avoid buying stocks in industries and companies with which you are unfamiliar.

Step7
Shop for total value. That means learning to calculate key financial figures such as price-earnings ratios so that you can compare one stock with others.

Step8
Resist fads. If everyone is buying gold, variable annuities or some other faddish investment, watch out. The herd soon will change direction.

Step9
Know when to fold. Your objective may be to hold a particular stock or mutual fund for three to five years, but if it appears to be on terminal descent, bail out.

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Step1
Pay attention to the values of currencies around the world. The British pound and the U.S. dollar are the most common traded currencies, as are the Japanese yen and the Swiss franc. Changes in value between these currencies is often gradual.

Step2
Exchange one currency for another as the difference in price shows significant change or the potential for significant change. For example, if you have U.S. dollars and it appears that the euro is about to become more valuable against the current value of the dollar, then exchange your dollars for euros.

Step3
Change currencies back and forth between different denominations as values fluctuate. For example, once the euros in the previous step become markedly more valuable than the U.S. dollar, then it might be a good time to sell those euros back.

Step4
Research the conditions of the economy in certain countries to determine if there is a bargain to be had. For example, currencies in developing countries often fluctuate in response to an increase or decrease in humanitarian aid or trade. Investing in those currencies when they are at rock-bottom prices can pay off tremendously in the future.

Step5
Invest in the forex market for the long term by simply leaving your present investments alone. This is not as safe in riskier currencies, like those of developing nations, but for currencies like the euro or the Swiss franc, you can often see a steady increase in value over the years.

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Conclusion

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Tuesday, January 6, 2009

The History of FOREX Trading

The origin of Forex trading traces its history to centuries ago.

Different currencies and the need to exchange them had existed since the Babylonians. They are credited with the first use of paper notes and receipts. Speculation hardly ever happened, and certainly the enormous speculative activity in the market today would have been frowned upon. In those days, the value of goods were expressed in terms of other goods(also called as the Barter System). The obvious limitations of such a system encouraged establishing more generally accepted mediums of exchange. It was important that a common base of value could be established.

In some economies, items such as teeth, feathers even stones served this purpose, but soon various metals, in particular gold and silver, established themselves as an accepted means of payment as well as a reliable storage of value. Trade was carried among people of Africa, Asia etc through this system. Coins were initially minted from the preferred metal and in stable political regimes, the introduction of a paper form of governmental I.O.U. during the middle Ages also gained acceptance. This type of I.O.U. was introduced more successfully through force than through persuasion and is now the basis of today's modern currencies. Before the First World war, most Central banks supported their currencies with convertibility to gold. However, the gold exchange standard had its weaknesses of boom-bust patterns. As an economy strengthened, it would import a great deal from out of the country until it ran down its gold reserves required to support its money; as a result, the money supply would diminish, interest rates escalate and economic activity slowed to the point of recession. Ultimately, prices of commodities had hit bottom, appearing attractive to other nations, who would sprint into buying fury that injected the economy with gold until it increased its money supply, drive down interest rates and restore wealth into the economy.. However, for this type of gold exchange, there was not necessarily a Centrals bank need for full coverage of the government's currency reserves. This did not occur very often, however when a group mindset fostered this disastrous notion of converting back to gold in mass, panic resulted in so-called "Run on banks " The combination of a greater supply of paper money without the gold to cover led to devastating inflation and resulting political instability. The Great Depression and the removal of the gold standard in 1931 created a serious lull in Forex market activity.

From 1931 until 1973, the Forex market went through a series of changes. These changes greatly affected the global economies at the time and speculation in the Forex markets during these times was little.

In order to protect local national interests, increased foreign exchange controls were introduced to prevent market forces from punishing monetary irresponsibility. Near the end of World War II, the Bretton Woods agreement was reached on the initiative of the USA in July 1944. The conference held in Bretton Woods, New Hampshire rejected John Maynard Keynes suggestion for a new world reserve currency in favor of a system built on the US Dollar. International institutions such as the IMF, The World Bank and GATT were created in the same period as the emerging victors of WWII searched for a way to avoid the destabilizing monetary crises leading to the war. The Bretton Woods agreement resulted in a system of fixed exchange rates that reinstated The Gold Standard partly, fixing the USD at $35.00 per ounce of Gold and fixing the other main currencies to the dollar, initially intended to be on a permanent basis.
The Bretton Woods system came under increasing pressure as national economies moved in different directions during the 1960's. A number of realignments held the system alive for a long time but eventually Bretton Woods collapsed in the early 1970's following president Nixon's suspension of the gold convertibility in August 1971. The dollar was not any longer suited as the sole international currency at a time when it was under severe pressure from increasing US budget and trade deficits. The last few decades have seen foreign exchange trading develop into the world's largest global market. Restrictions on capital flows have been removed in most countries, leaving the market forces free to adjust foreign exchange rates according to their perceived values. The European Economic Community introduced a new system of fixed exchange rates in 1979, the European Monetary System. The quest continued in Europe for currency stability with the 1991 signing of The Maastricht treaty. This was to not only fix exchange rates but also actually replace many of them with the Euro in 2002. London was, and remains the principal offshore market. In the 1980s, it became the key center in the Eurodollar market when British banks began lending dollars as an alternative to pounds in order to maintain their leading position in global finance. In Asia, the lack of sustainability of fixed foreign exchange rates has gained new relevance with the events in South East Asia in the latter part of 1997, where currency after currency was devalued against the US dollar, leaving other fixed exchange rates in particular in South America also looking very vulnerable. While commercial companies have had to face a much more volatile currency environment in recent years, investors and financial institutions have discovered a new playground. The Forex exchange market initially worked under the central banks and the governmental institutions but later on it accommodated the various institutions, at present it also includes the dot com booms and the world wide web. The size of the Forex market now dwarfs any other investment market. The foreign exchange market is the largest financial market in the world. Approximately 1.9 trillion dollars are traded daily in the foreign exchange market.

It is estimated that more than USD 1,200 Billion are traded every day. It can be said easily that Forex market is a lucrative opportunity for the modern day savvy investor.

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Forex Trading — Opportunities for Individuals

Forex Trading-How Can Individual Investors Benefit?

Indeed large multinational and individual banks and other major financial institutions have dominated FX trading (also known as Forex trading), but there is a paradigm change in the nature and type of investing. According to one estimate, in the new millennium, there are over 6 million online investment accounts, up from 1.5 million in 1997. As a result, start-up firms now compete directly with financial institutions to serve investors in the new technologically driven economy, and the clear winner is the customer. The competition between the brick and mortar institutions and the Internet-based companies has dramatically lowered the costs of investing, and empowered the individual investor to take control of their own investment strategy in Forex trading.

We know Forex trading is direct access trading of currencies. In the past, foreign exchange trading was limited to large banks and institutional traders but recent advancements in technology have allowed small traders to take advantage of the many benefits of Forex trading using online trading platforms to trade. Virtually Forex trading is done 24 hours day and almost 5 ? days of a week. In the recent times, online trading has revolutionized the currency markets by making it accessible to the small and medium sized investor.

The Forex trading is perhaps the largest financial market in the world, with a daily average turnover of approximately $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 EUR/USD or USD/JPY or USD/INR etc.
In the new millennium, the Forex trading has become accessible for an individual investor or small group of investors. In the current scenario, investors reap many benefits from Forex trading than stock market, e-mini futures and such other trading. Today mostly traders are choosing Forex trading than stock trading because there are approximately 4,500 stocks listed on the New York Stock exchange. Another 3,500 are listed on the NASDAQ. In spot Forex trading, you have 4 major markets, 24 hours a day 5.5 days a week. If you are so inclined, you have approximately 34 second-tier currencies to look at in your spare time. You can concentrate on the major forex and can find your trade. When you are investing in forex you can spend your afternoon on the golf course or with your spouse watching movie or celebrating holidays-in short it is easy and hassle free than stock/future market.

Not only is it an accessible, easy and less capital-intensive business opportunity, but it is much more cost efficient too to invest in the Forex market, in terms of both commissions and transaction fees. Generally, commissions for stock trades range from a low of $7.95-$29.95 per trade with on-line brokers to over $100 per trade with traditional brokers. Opposite to that, typically stock commissions are directly related to the level of service offered by the broker. At the high end, traditional brokers offer full access to research, analyst stock recommendations, etc. In contrast, on-line Forex brokers charge significantly lower commission and transaction fees.

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Forex Made Easy for Everyone

Forex made easy is as simple as you would want it to be.

The foreign exchange market is a worldwide market and according to some estimates is almost as big as thirty times the turnover of the US Equity markets. That is some figure to chew on. Forex is the commonly used term for foreign exchange. As a person who wants to invest in the forex market, one should understand the basics of how this currency market operates. Forex can be made easier for beginners to understand it and here's how.

Foreign exchange is the buying and the selling of foreign exchange in pairs of currencies. For example you buy US dollars and sell UK Sterling pounds or you sell German Marks and buy Japanese Yen. Why are currencies bought or sold? The answer is simple; Governments and Companies need foreign exchange for their purchase and payments for various commodities and services. This trade constitutes about 5% of all currency transactions, however the other 95% currency transactions are done for speculation and trade. In fact many companies will buy foreign currency when it is being traded at a lower rate to protect their financial investments.

Another thing about foreign exchange market is that the rates are varying continuously and on daily basis. Therefore investors and financial managers track the forex rates and the forex market it on a daily basis. Those who are involved in the forex trade know that almost 85% of the trading is done in only US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. This is because they are the most liquid of foreign currencies (can be easily bought and sold. In fact the US Dollar is most recognizable foreign currency even in countries like Afghanistan, Iraq, Vietnam etc). Being a truly 24/7 market, the currency trading markets opens in the financial centers of Sydney, Tokyo, London and New York in that sequence. Investors and speculators alike respond to the ever-changing situations and can buy and sell simultaneously the currencies. In fact many operate in two or more currency market using arbitrage to gain profits (buying in one market and selling in another market or vice versa to take advantage of the prices and book profits). While dealing in forex, one should have a margin account. Quite simply put if you have US$ 1,000 and have a forex margin account which leverages 100:1 then you can buy US$ 100,000 since you only need 1% of the US$100,000 or US$1,000. Therefore it means that with margin account you have US$ 100,000 worth of real purchasing power in your hand. Since the foreign currency market is fluctuating on a continuous basis, one should be able to understand the factors that affect this currency market. This is done through Technical Analysis and Fundamental Analysis. These two tools of trade are used in a variety of other markets such as equity markets, stock markets, mutual funds markets etc.

Technical Analysis refers to reading, summarizing and analyzing data based on the data that is generated by the market. While fundamental Analysis refers to the factors, which influence the market economy, and in turn how it would affect the currency trading. Of course there are other economic and non economic factors which can suddenly affect the trading of the forex markets such as the 9/11 tragedy etc. One needs to have a shrewd acumen and a few number crunching abilities to strike gold in the forex market.

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How to Get Started In Forex Trading

You may have been hearing about the foreign exchange market (Forex) and the investment advantages it offers. You would like to try it out, but don't know where to start. This short guide will give you the basics in Forex and tell you what you need to participate in this fast growing field.

Foreign exchange used to be limited to large players such as national banks and multi-national corporations. In the 1980's the rules were revised to allow smaller investors to participate using margin accounts. Margin accounts are the reason why Forex trading has become so popular. With a 100:1 margin account, you can control $100,000 with a $1,000 investment. Forex is not simple, however, and education is needed to make wise investment decisions. Although it is relatively easy to start trading on the Forex, there are risks involved, so finding out as much as possible about the market is a good move for any beginner. Forex traders usually require a broker to handle transactions. Most brokers are reputable and are associated with large financial institutions such as banks. A reputable broker will be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) as protection against fraud and abusive trade practices. Opening a Forex account is as simple as filling out a form and providing the necessary ID. The form will include a margin agreement that states that the broker can interfere with any trade it deems to be too risky.

This is to protect the interests of the broker — most trades, after all, are done using the broker's money. Once your account has been established, you can fund it and begin trading. Many brokers have different types of accounts to suit the needs of individual investors. Mini accounts allow you to get involved in Forex trading for as little as $250, while standard accounts may have a minimum deposit of $1000 to $2500 depending on the broker. The amount of leverage — using borrowed money — varies with accounts. High leverage gives you more money to trade for a given investment. HOWEVER — beginner traders are advised get accustomed to Forex by doing paper trades for a period of time. Paper trades are practice transactions that don't involve real capital. They allow you to see how the system works while learning how to use the various software tools that are at provided by most Forex brokers. Most online brokers have demo accounts that allow you to make free paper trades for up to 30 days.

Every new Forex investor is strongly advised to use these demo accounts at least until they are showing consistently steady profits. Each broker has their own set of software tools to aid in making transactions, but there are a few tools that are common to all Forex brokers. Real time quotes, news feeds, technical analyses and charts, and profit and loss analyses are some of the features you should expect to see on most online brokers' web sites. Almost every broker operates on the Internet. To access their online services you should have a reasonably modern computer, a fast Internet connection, and an up-to-date operating system such as Windows XP. Once your account is set up, you can access it from any computer — just enter your account name and password. If for some reason you are not able get access to a computer, most brokers will allow you to make trades over the phone. Trades are commission free, meaning that you can make many trades in one day without worrying about incurring high brokerage fees. Brokers make their money on the 'spread' — the difference between bids and ask prices.

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Sunday, January 4, 2009

Emerging Currencies and Forex Opportunities

Forex markets are the world's largest markets trading approximately 2 billion dollars daily.

With the United States financial crisis looming large there has been increased interest in the FX opportunities provided by emerging currencies. Emerging currencies include such relatively unknown currencies as the South African Rand, The Hong Kong and Singapore dollar, and currencies from countries with emerging economies in Asia and Latin America.

Since the recent downturn of the United States dollar many Forex traders and investors are turning their attention to emerging currencies and the Forex opportunities they provide. These emerging currencies are available to average investors now that many FX brokers are adding these currencies to their trading platforms. These currencies are the result of emerging economies and are traded like any other major currencies. These currencies are subject to the same factors that drive major currencies such as monetary policy, political considerations and events, and both external and internal conditions.

As a result of these similarities both experienced and novice traders can use the experiences they have gained by trading major currencies. Many of these countries have institutions and policies in place that mirror the policies of more industrialized countries. For example, South Africa has a central bank which determines rate hikes or cuts much like the United States Federal Reserve. In Hong Kong the Monetary Authority focuses on the stability of the Hong Kong Dollar and the banking sector. The Hong Kong Monetary Authority maintains a system where the Hong Kong Dollar is tied to an anchor currency, usually the United States Dollar or the British Pound.

One can see by the above examples that trading in these currencies carries no more risk than trading in the major currencies and provides Forex traders with new and exciting opportunities. Although relatively unknown, these emerging market currency pairs offer new opportunities for both experienced and new traders. Since market conditions are very similar to those of major currency pairs traders can use the knowledge and experience gained to take advantage of Forex opportunities offered by these emerging currency pairs.

The short term losses likely to be suffered by the United States dollar can be easily mitigated by researching these emerging currencies, and taking advantage of the exciting FX opportunities offered.

To find out more about the FX market, you can check out online news services that specialize in political and financial news. Investors may sign up for very specific alerts dealing with the minutest aspect of world economies and how they are expected to affect Forex markets. For those who wish to have control of their Forex trades following world events is essential for making informed decisions. Forex trading requires research, education, discipline, patience, and occasionally nerves of steel.

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