BEST FOREX BLOG

Important Forex Trading Terms

2009-08-15T22:33:00.001-07:00

Important Forex Trading Terms

Spread
The Spread is the difference between the price that you can sell currency at (Bid) and the price you can buy currency at (Ask). The spread on majors is usually 3 pips under normal market conditions. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary.
Pips
A pip is the smallest unit by which a cross price quote changes. When trading Forex you will often hear that there is a 3-pip spread when you trade the majors. This spread is revealed when you compare the bid and the ask price, for example EURUSD is quoted at a bid price of 0.9875 and an ask price of 0.9878. The difference is USD 0.0003, which is equal to 3 “pips”.

On a contract or position, the value of a pip can easily be calculated. You know that the EURUSD is quoted with four decimals, so all you have to do is cancel out the four zeros on the amount you trade and you will have the value of one pip. Thus, on a EURUSD 100,000 contract, one pip is USD 10. On a USDJPY 100,000 contract, one pip is equal to 1000 yen, because USDJPY is quoted with only two decimals.

Why Trade Forex?

2009-08-15T22:31:00.002-07:00

Why Trade Forex?

24 hour trading
One of the major advantages of trading Forex is the opportunity to trade 24 hours a day from Sunday evening (20:00 GMT) to Friday evening (22:00 GMT). This gives you a unique opportunity to react instantly to breaking news that is affecting the markets.
Superior liquidity
The Forex market is so liquid that there are always buyers and sellers to trade with. The Liquidity of this market, especially that of the major currencies, helps ensure price stability and narrow spreads. The liquidity comes mainly from banks that provide liquidity to investors, companies, institutions and other currency market players.
No commissions
The fact that Forex is often traded without commissions makes it very attractive as an investment opportunity for investors who want to deal on a frequent basis.
Trading the “majors” is also cheaper than trading other cross because of the high level of liquidity. For more information on the trading conditions of Saxo Bank, go to the Account Summary on your SaxoTrader and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary.
100:1 Leverage
Leverage (gearing) enables you to hold a position worth up to 100 times more than your margin deposit. For example, a USD 10,000 deposit can command positions of up to USD 1,000,000 through leverage. You can leverage the first USD 25,000 of your investment up to 100 times and additional collateral up to 50 times.
Profit potential in falling markets
Since the market is constantly moving, there are always trading opportunities, whether a currency is strengthening or weakening in relation to another currency. When you trade currencies, they literally work against each other. If the EURUSD declines, for example, it is because the US dollar gets stronger against the euro and vice versa. So, if you think the EURUSD will decline (that is, that the euro will weaken versus the dollar), you would sell EUR now and then later you buy euro back at a lower price. In case that the EURUSD indeed declines, then you can take your profit. The opposite trading scenario would occur if the EURUSD appreciates.

Trading on Margin

2009-08-15T22:31:00.001-07:00

Trading on Margins means that you can buy and sell assets that represent more value than the capital in your account. Forex trading is usually conducted with relatively small margin deposits. This is useful since it permits investors to exploit currency exchange rate fluctuations which tend to be very small. A margin of 1.0% means you can trade up to USD 1,000,000 even though you only have USD 10,000 in your account. A margin of 1% corresponds to a 100:1 leverage (or “gearing”). (Because USD 10,000 is 1% of USD 1,000,000.) Using this much leverage enables you to make profits very quickly, but there is also a greater risk of incurring large losses and even being completely wiped out. Therefore, it is inadvisable to maximise your leveraging as the risks can be very high. For more information on the trading conditions of Saxo Bank, go to the Account Summary on your SaxoTrader and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary.

Forward Outrights

2009-08-15T22:30:00.000-07:00

For forward outrights, settlement on the value date selected in the trade means that even though the trade itself is carried out immediately, there is a small interest rate calculation left. The interest rate differential doesn't usually affect trade considerations unless you plan on holding a position with a large differential for a long period of time. The interest rate differential varies according to the cross you are trading. On the USDCHF, for example, the interest rate differential is quite small, whereas the differential on NOKJPY is large. This is because if you trade e.g. NOKJPY, you get almost 7% (annual) interest in Norway and close to 0% in Japan. So, if you borrow money in Japan, to finance the trade and buying NOK, you have a positive interest rate differential. This differential has to be calculated and added to your account. You can have both a positive and a negative interest rate differential, so it may work for or against you when you make a trade.

Trading Forex

2009-08-15T22:29:00.000-07:00

A currency trade is the simultaneous buying of one currency and selling of another one. The currency combination used in the trade is called a cross (for example, the euro/US dollar, or the GB pound/Japanese yen.). The most commonly traded currencies are the so-called “majors” – EURUSD, USDJPY, USDCHF and GBPUSD.

The most important Forex market is the spot market as it has the largest volume. The market is called the spot market because trades are settled immediately, or “on the spot”. In practice this means two banking days.

Forex Overview

2009-08-15T22:28:00.000-07:00

Foreign exchange, FX are all terms used to describe the trading of the world's many currencies. The Forex market is the largest market in the world, with trades amounting to more than USD 3 trillion every day. Most Forex trading is speculative, with only a low percentage of market activity representing governments' and companies' fundamental currency conversion needs.

Unlike trading on the stock market, the Forex market is not conducted by a central exchange, but on the “interbank” market, which is thought of as an OTC (over the counter) market. Trading takes place directly between the two counterparts necessary to make a trade, whether over the telephone or on electronic networks all over the world. The main centres for trading are Sydney, Tokyo, London, Frankfurt and New York. This worldwide distribution of trading centres means that the Forex market is a 24-hour market.

Foreign Exchange

2009-08-15T22:26:00.000-07:00

This short introduction explains the basics of trading Forex online, a brief explanation of the markets and the major benefits of trading Forex online. There are also two scenarios describing the implications of trading in a bear as well as a bull market to better acquaint you with some of the risks and opportunities of the largest and most liquid market in the world.

As an additional aid for those who are new to Forex, there is also a glossary at the bottom of this text which explains some of the terms used in connection with currency trading.

Brazil's Real Rebounded on US optimism

2009-08-08T04:26:00.000-07:00

he Brazilian real, currency which had its rally halted yesterday as negative reports pushed stocks and commodities down around the world, climbed again today as U.S. employment data came better-than-expected.

DENMARK FOREX

2009-06-16T22:50:00.001-07:00

Forex is a Swedish financial services company. The company was started in 1927 as a currency exchange service for travellers, at the Central Station in Stockholm. The owner of Gyllenspet's Barber Shop, according to the legend, discovered that most of his customers were tourists in need of currency for their trips. So he started keeping the major currencies on hand.
The company was subsequently acquired by Statens Järnvägar, the Swedish State Railways, which expanded the operations until it was sold off to one of the managers, Rolf Friberg, in 1965. The company was the only one apart from the banks that was licensed to conduct currency exchange in Sweden.
The company, which is still wholly owned by the Friberg family, has expanded into Denmark and Finland and has over 50 shops, usually located at train stations or airports. The decrease in the business brought on by introduction of the Euro has made the company look for alternative sources of revenue, like applying for a banking license and attempting to move into more regular transaction services, earlier handled by the Swedish postal service.

HONG KONG FOREX

2009-06-16T22:46:00.000-07:00

Citibank began operations in Hong Kong in 1902, thus becoming the first foreign bank to offer its services there. Citibank (Hong Kong) Limited is a licensed bank incorporated in Hong Kong. It is traded with the Chinese trading name 花旗銀行 (formerly 萬國寶通銀行). An office tower, the Citibank Plaza, in Garden Road, Central, Hong Kong is named after the bank.

[edit] Company Profile
Citibank Hong Kong has a network of 25 branches spread over Hong Kong Island, Kowloon, New Territories and Macao .

[edit] Awards
• 2008: Awarded Best Flexible Work Practices by the Hong Kong HR Awards• 2008: SME’s Best Partner Award• 2008: Asian Banker Achievement Awards• 2007: Supreme Service Award• 2007: Best Practice Awards• 2007: Best Bank in Wealth Management Award• 2007: awarded the Best Foreign Bank by FinanceAsia• 2007: awarded the Best Foreign Cash Management Bank by Asiamoney• 2007: awarded the Overall Best Global Private Bank by Asiamoney magazine for the 3rd time• 2007: recognized as the Best Equity House by Euromoney• 2007: awarded the Excellence in Wealth Management Award by Asian Banker• 2007: awarded the Best Wealth Management Bank (Citigold) by Capital Magazine.• 2004: Selected Most Preferred Bank by Asia’s Top 1,000 Brand Listing.

Bangladesh Forex

2009-06-16T22:45:00.000-07:00

In 1971, East Pakistan became the independent nation of Bangladesh with the Pakistan Rupee as domestic currency. The taka became Bangladesh's currency in 1972, replacing the Pakistani rupee at par. The word "taka" is derived from the Sanskrit term tanka which was an ancient denomination of silver coin. The term taka was widely used in different parts of India but with varying meanings. In north India, taka was a copper coin equal to two paise and in the south, it was equal to four paisa or one anna. It was only in Bengal and Orissa where taka was equal to the rupee. In all areas of India, taka was used informally for money in general. However, Bengal was the stronghold of the taka.
The rupee was introduced by the Turko-Afghan rulers and was strongly upheld by the Mughals and the British rulers. The Bengali people always used the word taka for the rupee, whether silver or gold. Ibn Battuta, the Arab traveller, noticed that, in Bengal, people described gold coins (Dinar) as gold tanka and silver coin as silver tanka. In other words, whatever might be the metallic content of the coin, the people called it taka. This tradition has been followed to this day in eastern regions like Bangladesh, West Bengal, Tripura, Orissa, and Assam. The Indian rupee is officially known as টাকা ṭaka in Bengali, টকা tôka in Assamese, and ଟଙ୍କା ṭôngka in Oriya, and is written as such on Indian banknotes.

[edit] Issuing authority
Currency notes and coins of the taka are issued by the Bangladesh Bank which is the central bank of Bangladesh. Currency notes bear the signature of the governor of the Bangladesh Bank who promises to pay the equivalent value in exchange. The exception is the one taka note. In this case it is the Ministry of Finance of the Government of Bangladesh that shoulders the responsibility. One taka notes bear the signature of the Finance Secretary to the government.

[edit] Value fluctuation
At independence the value of the taka, Bangladesh's unit of currency, was set between 7.5 and 8.0 to US$1.[1] With the exception of fiscal year 1978, the taka's value relative to the dollar declined every year from 1971 through the end of 1987.[1] To help offset this phenomenon, Bangladesh first used the compensatory financing facility of the International Monetary Fund in fiscal year 1974.[1] Despite the increasing need for assistance, the Mujib government was initially unwilling to meet the IMF's conditions on monetary and fiscal policy.[1] By fiscal year 1975, however, the government revised its stance, declaring a devaluation of the taka by 56 percent and agreeing to the establishment by the World Bank of the Bangladesh Aid Group.[1]
Between 1980 and 1983, the taka sustained a decline of some 50 percent because of a deterioration in Bangladesh's balance of payments.[1] Between 1985 and 1987, the taka was adjusted in frequent incremental steps, stabilizing again around 12 percent lower in real terms against the United States dollar, but at the same time narrowing the difference between the official rate and the preferential secondary rate from 15 percent to 7.5 percent.[1] Accompanying this structural adjustment was an expansion in the amount of trade conducted at the secondary rate, to 53 percent of total exports and 28 percent of total imports.[1] In mid-1987, the official rate was relatively stable, approaching less than Tk31 to US$1.[1]

Egypt Forex

2009-06-16T22:44:00.000-07:00

Egypt, officially known as the Arab Republic of Egypt, is a country in North Africa that includes the Sinai Peninsula, a land bridge to Asia. Covering an area of about 1,001,450 square kilometers (386,660 sq mi), Egypt borders Libya to the west, Sudan to the south and the Gaza Strip and Israel to the east. Its northern coast borders the Mediterranean Sea; the eastern coast borders the Red Sea.
Egypt is one of the most populous countries in Africa. The great majority of its estimated 80 million people (2007) live near the banks of the Nile River, in an area of about 40,000 square kilometers (15,000 sq mi), where the only arable agricultural land is found. The large areas of the Sahara Desert are sparsely inhabited. About half of Egypt's residents live in the densely-populated centres of greater Cairo, Alexandria and other major cities in the Nile Delta.
Egypt is famous for its ancient civilization and some of the world's most famous monuments, including the Giza pyramid complex and its Great Sphinx. The southern city of Luxor contains numerous ancient artefacts, such as the Karnak Temple and the Valley of the Kings. Egypt is widely regarded as an important political and cultural nation of the Middle East.

Behrain Forex

2009-06-16T22:29:00.000-07:00

Bahrain, officially known as the Kingdom of Bahrain, is an island country in the Persian Gulf. Saudi Arabia lies to the west and is connected to Bahrain by the King Fahd Causeway (officially opened on November 25, 1986), and Qatar is to the south across the Gulf of Bahrain. The Qatar–Bahrain Friendship Bridge being planned will link Bahrain to Qatar as the longest fixed link in the world[1].
The following topic outline is provided as an overview of and introduction to Bahrain:

PAKISTAN FOREX

2009-06-16T21:37:00.000-07:00

The foreign exchange market (Currency, Forex, or FX) market is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. [1]FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system till 1971.
Today, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]
The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such currencies.

KENYA FOREX

2009-06-16T21:35:00.000-07:00

Kenya, officially the Republic of Kenya, is a country in East Africa. It is bordered by Ethiopia to the north, Somalia to the east, Tanzania to the south, Uganda to the west, and Sudan to the northwest, with the Indian Ocean running along the southeast border. The country is named after Mount Kenya, a very significant landmark,[1][2] and both were originally usually pronounced ˈkiːnjə[3] in English although the native pronunciation and the one intended by the original transcription Kenia was ˈkenia.[4] During the presidency of Jomo Kenyatta in the 1960s, the current pronunciation ˈkɛnjə became widespread in English too because his name was pronounced according to the original native pronunciation.[5] Before 1920, the area now known as Kenya was known as the British East Africa Protectorate and so there was no need to mention mount when referring to the mountain

BEST FOREX BLOG

Important Forex Trading Terms

Important Forex Trading Terms

Spread

Pips

Why Trade Forex?

24 hour trading

Superior liquidity

No commissions

100:1 Leverage

Profit potential in falling markets

Trading on Margin

Forward Outrights

Trading Forex

Forex Overview

Foreign Exchange

Brazil's Real Rebounded on US optimism

DENMARK FOREX

HONG KONG FOREX

Bangladesh Forex

Egypt Forex

Behrain Forex

PAKISTAN FOREX

KENYA FOREX