What is Forex? Forex is an abbreviation of Foreign Exchange (also referred to as FX) and it is the largest financial market in the world.
The Forex market is the place where currencies are traded (currencies are money that is used as an exchange medium). In other words, it is the place where currencies are being sold and bought. In the Forex market all currencies are traded in real time.
Trading with currencies always means that there are two simultaneous transactions taking place. If a currency is being bought, it is also being sold. To better understand this notion, think of currencies as both the goods you are buying AND the method with which you're paying for the goods.
Since the Forex market is the place where currencies are traded in real time, people may trade one currency for another and make a profit off of this transaction. Profits are made when one is able to determine which currency's value will increase by the end of a pre-determined time period (such time periods may be short or long). The Forex market is open 24 hours a day, five days a week and it is based in four major cities: New York, London, Sydney, and Tokyo. The Forex market is open to individuals over the age of eighteen.
While Forex trading may sound daunting, it really isn't. It can be easily comprehended and understood without prior experience in finance or economy. It is challenging and exciting, thought provoking and manageable, stimulating and filled with opportunities.
Some Forex Basics:
The first currency listed in a currency pair is called the "base currency".
The "base currency" is usually the U.S. Dollar. Traders will generally trade the U.S. Dollar against another currency, which is called the "counter currency".
Currencies are quoted in pairs. For example: The pair U.S. Dollar and JPY will be quoted in the following way: USD/JPY equals to 2.5 (This means that 1 U.S. Dollar can buy 2.5 JPY).
When a quote increases, it means that the "base currency" has risen in value and the "counter currency" has weakened in value. For example: If the USD/JPY quote used to be equal to 2.5 but is now equal to 2.6, then this means that the dollar has strengthened (because 1 U.S. Dollar can now buy 2.6 JPY as opposed to the mere 2.5 JPY it could buy beforehand.)
Now that you know a thing or two about the Foreign Exchange market, we invite you to explore eToro-the Revolutionary Forex Trading Platform. You too can make your mark in the Foreign Exchange market. Use eToro as your gateway to the ever-growing world of Forex trading.
Kamis, 25 Agustus 2011
LEARN FOREX TRADING ONLINE
What is Forex? Forex is an abbreviation of Foreign Exchange (also referred to as FX) and it is the largest financial market in the world.
The Forex market is the place where currencies are traded (currencies are money that is used as an exchange medium). In other words, it is the place where currencies are being sold and bought. In the Forex market all currencies are traded in real time.
Trading with currencies always means that there are two simultaneous transactions taking place. If a currency is being bought, it is also being sold. To better understand this notion, think of currencies as both the goods you are buying AND the method with which you're paying for the goods.
Since the Forex market is the place where currencies are traded in real time, people may trade one currency for another and make a profit off of this transaction. Profits are made when one is able to determine which currency's value will increase by the end of a pre-determined time period (such time periods may be short or long). The Forex market is open 24 hours a day, five days a week and it is based in four major cities: New York, London, Sydney, and Tokyo. The Forex market is open to individuals over the age of eighteen.
While Forex trading may sound daunting, it really isn't. It can be easily comprehended and understood without prior experience in finance or economy. It is challenging and exciting, thought provoking and manageable, stimulating and filled with opportunities.
Some Forex Basics:
The first currency listed in a currency pair is called the "base currency".
The "base currency" is usually the U.S. Dollar. Traders will generally trade the U.S. Dollar against another currency, which is called the "counter currency".
Currencies are quoted in pairs. For example: The pair U.S. Dollar and JPY will be quoted in the following way: USD/JPY equals to 2.5 (This means that 1 U.S. Dollar can buy 2.5 JPY).
When a quote increases, it means that the "base currency" has risen in value and the "counter currency" has weakened in value. For example: If the USD/JPY quote used to be equal to 2.5 but is now equal to 2.6, then this means that the dollar has strengthened (because 1 U.S. Dollar can now buy 2.6 JPY as opposed to the mere 2.5 JPY it could buy beforehand.)
Now that you know a thing or two about the Foreign Exchange market, we invite you to explore eToro-the Revolutionary Forex Trading Platform. You too can make your mark in the Foreign Exchange market. Use eToro as your gateway to the ever-growing world of Forex trading.
The Forex market is the place where currencies are traded (currencies are money that is used as an exchange medium). In other words, it is the place where currencies are being sold and bought. In the Forex market all currencies are traded in real time.
Trading with currencies always means that there are two simultaneous transactions taking place. If a currency is being bought, it is also being sold. To better understand this notion, think of currencies as both the goods you are buying AND the method with which you're paying for the goods.
Since the Forex market is the place where currencies are traded in real time, people may trade one currency for another and make a profit off of this transaction. Profits are made when one is able to determine which currency's value will increase by the end of a pre-determined time period (such time periods may be short or long). The Forex market is open 24 hours a day, five days a week and it is based in four major cities: New York, London, Sydney, and Tokyo. The Forex market is open to individuals over the age of eighteen.
While Forex trading may sound daunting, it really isn't. It can be easily comprehended and understood without prior experience in finance or economy. It is challenging and exciting, thought provoking and manageable, stimulating and filled with opportunities.
Some Forex Basics:
The first currency listed in a currency pair is called the "base currency".
The "base currency" is usually the U.S. Dollar. Traders will generally trade the U.S. Dollar against another currency, which is called the "counter currency".
Currencies are quoted in pairs. For example: The pair U.S. Dollar and JPY will be quoted in the following way: USD/JPY equals to 2.5 (This means that 1 U.S. Dollar can buy 2.5 JPY).
When a quote increases, it means that the "base currency" has risen in value and the "counter currency" has weakened in value. For example: If the USD/JPY quote used to be equal to 2.5 but is now equal to 2.6, then this means that the dollar has strengthened (because 1 U.S. Dollar can now buy 2.6 JPY as opposed to the mere 2.5 JPY it could buy beforehand.)
Now that you know a thing or two about the Foreign Exchange market, we invite you to explore eToro-the Revolutionary Forex Trading Platform. You too can make your mark in the Foreign Exchange market. Use eToro as your gateway to the ever-growing world of Forex trading.
FOREX OVERVIEW
What is Currency Exchange?
Currency exchange is the trading of one currency against another at a set price or rate, called an exchange rate. Currency exchange is synonymous with foreign exchange and is often referred to using the acronyms Forex or FX.
The FX Market
In terms of trading volume, daily FX turnover exceeds $1.5 trillion US dollars (source: Bank of International Settlements). This makes the FX market the world's largest, most efficient market, dwarfing both the US bond and equity markets. The New York Stock Exchange, for example, has a daily trading volume of approximately $30 billion. In turn, the FX market is by far the most liquid market in the world today. Due to the sheer size of the FX market, it is virtually impossible for individuals or companies to impact exchange rates. In fact, even central banks and governments find it increasingly difficult to affect the exchange rates of the most liquid currencies, such as the US dollar, Japanese Yen, Euro, Swiss Franc, Canadian Dollar or Australian Dollar.
The FX market was established in 1971 when floating exchange rates began to materialize. It is an inter-bank or inter-dealer market based on the vast network of hundreds of major banks across the globe. Additionally, it is an Over-The-Counter market (OTC), meaning that transactions are conducted between any counter parties that agree to trade via the telephone or an electronic network. The FX market is unique in that it has no fixed location or centralized exchange, as do many stock markets including the NYSE, ASE and CME. Dealers often advertise, negotiate and transact based upon exchange rates obtained directly or via distribution networks, such as Reuters or Bridge.
Typically, trades of $1 million and above constitute the institutional marketplace. Trades below this $1 million threshold constitute the retail marketplace.
The major dealing centers today are: London (with over 50% of the market), followed by New York, Tokyo, Zurich, Frankfurt, Hong Kong and Singapore, Paris and Sydney.
The FX market is a true 24-hour market, 5 days a week. With dealers in every major time zone. Trading begins Monday morning in Sydney (which corresponds to 7 PM EST, Sunday) and then moves around the globe through the various trading centers until the market closes at 4:30 EST in New York.
Today, over 85% of all FX transactions involve seven major currencies: the US Dollar (USD), Japanese Yen (JPY), Euro (EUR), Swiss Franc (CHF), British Pound (GBP), Canadian Dollar (CAD), and Australian Dollar (AUD). In the FX market, currencies are primarily traded against the US dollar. This means that most exchange rates are quoted with the US Dollar as the base or first currency quoted in a pair (i.e. USD/JPY). Exceptions to the rule are the GBP, NZD (New Zealand Dollar), AUD and the EUR (Euro).
The term cross rate refers to an exchange rate between two non-US Dollar currencies. Trading between two non-US Dollar currencies usually occurs by first trading one against the US Dollar and then trading the US Dollar against the second non-US Dollar currency. There are a few non-US Dollar currencies that are traded directly, such as GBP/EUR or EUR/CHF.
Currency exchange is the trading of one currency against another at a set price or rate, called an exchange rate. Currency exchange is synonymous with foreign exchange and is often referred to using the acronyms Forex or FX.
The FX Market
In terms of trading volume, daily FX turnover exceeds $1.5 trillion US dollars (source: Bank of International Settlements). This makes the FX market the world's largest, most efficient market, dwarfing both the US bond and equity markets. The New York Stock Exchange, for example, has a daily trading volume of approximately $30 billion. In turn, the FX market is by far the most liquid market in the world today. Due to the sheer size of the FX market, it is virtually impossible for individuals or companies to impact exchange rates. In fact, even central banks and governments find it increasingly difficult to affect the exchange rates of the most liquid currencies, such as the US dollar, Japanese Yen, Euro, Swiss Franc, Canadian Dollar or Australian Dollar.
The FX market was established in 1971 when floating exchange rates began to materialize. It is an inter-bank or inter-dealer market based on the vast network of hundreds of major banks across the globe. Additionally, it is an Over-The-Counter market (OTC), meaning that transactions are conducted between any counter parties that agree to trade via the telephone or an electronic network. The FX market is unique in that it has no fixed location or centralized exchange, as do many stock markets including the NYSE, ASE and CME. Dealers often advertise, negotiate and transact based upon exchange rates obtained directly or via distribution networks, such as Reuters or Bridge.
Typically, trades of $1 million and above constitute the institutional marketplace. Trades below this $1 million threshold constitute the retail marketplace.
The major dealing centers today are: London (with over 50% of the market), followed by New York, Tokyo, Zurich, Frankfurt, Hong Kong and Singapore, Paris and Sydney.
The FX market is a true 24-hour market, 5 days a week. With dealers in every major time zone. Trading begins Monday morning in Sydney (which corresponds to 7 PM EST, Sunday) and then moves around the globe through the various trading centers until the market closes at 4:30 EST in New York.
Today, over 85% of all FX transactions involve seven major currencies: the US Dollar (USD), Japanese Yen (JPY), Euro (EUR), Swiss Franc (CHF), British Pound (GBP), Canadian Dollar (CAD), and Australian Dollar (AUD). In the FX market, currencies are primarily traded against the US dollar. This means that most exchange rates are quoted with the US Dollar as the base or first currency quoted in a pair (i.e. USD/JPY). Exceptions to the rule are the GBP, NZD (New Zealand Dollar), AUD and the EUR (Euro).
The term cross rate refers to an exchange rate between two non-US Dollar currencies. Trading between two non-US Dollar currencies usually occurs by first trading one against the US Dollar and then trading the US Dollar against the second non-US Dollar currency. There are a few non-US Dollar currencies that are traded directly, such as GBP/EUR or EUR/CHF.
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