Category Archives: Forex Trading Articles

Forex Trading Articles

Factors that Influence the Forex Markets

The Size of the Market

Successfully determining the future price movements of a currency pair in forex can be difficult, due to the size and nature of the market.

The forex market is a 24-hour market that is decentralised in nature, meaning that it has no central exchange. Given its global scope and unlimited opening time, forex is the largest market in the world in terms of total funds traded on a daily basis. What this means is that the range of factors that can influence a currency pair can itself be global, unlimited in time or be driven by any number of financial market players.

An Overview of the Most Commonly Cited Factors

Of course, this high level view of forex can be, to some extent, misleading. You may be trading a currency pair in a very limited time scale and with a clear understanding of the immediate historical and market contexts. Your belief in the future price movements of your traded currency pair can turn out to be correct; as well as, of course, incorrect.

Some of the most commonly cited factors influencing forex include interest rate increases/decreases, ‘expected’ interest rate increases/decreases, inflation rates and central bank interventions.

Supply & Demand

Currencies are always traded in pairs. For example, you may sell or buy the US dollar against the pound as the prices between the two currencies diverge. Demand for a currency can exceed its available supply, typically making it more valuable. Demand, importantly, can be actual or speculative; in the case of the latter, you might speculate that a currency is likely to be in greater demand than it currently is and you can trade to that effect.

Note that demand is often based on interest rates where higher interest rates often, but not always, make a currency more attractive.

Central Bank Interventions

Central Banks, commonly involved in setting or helping to set interest rates, also have a major influence on forex. National currency prices can be actively boosted or devalued by large-scale central bank interventions. A government could supply or ‘flood’ forex with its domestic currency in an attempt to devalue it, Quantitative Easing is an example of this. Conversely, large-scale government buying of its national currency can boost its value.

Political Events Political instability can occur anywhere around the world, depending on local factors and historical context. It is not impossible for political instability to occur in historically very stable countries. When a country becomes politically unstable, its national currency can devalue as investors lose confidence in the national governments’ ability to effectively support a prosperous business climate. Conversely, countries recovering from a period of political instability can become more attractive to investors, thus boosting its national currency. Rising or falling unemployment rates can similarly affect national economies.

Market Sentiment

Note that the Forex markets can also be influenced by raw market sentiment. This essentially means that forex traders can be more or less optimistic, with the sentiment spreading to such an extent it starts to influence buying/selling decisions. If an investor is looking to speculate in this way then one of the simplest ways to access the markets is through FX spread betting.

If you are trading the forex markets then note that margined forex and financial spread betting do carry a high level of risk to your trading capital and can result in you losing more than your initial stake. Ensure that spread betting fits your investment needs as it might not be appropriate for all investors. Only speculate with money that you can afford to lose. Before trading, please ensure you fully appreciate the risks involved and if required request independent advice.

Forex Trading Articles

Currency Floating Exchange Rates

Currency FloatingExchange Rates A traditional argument in favor of flexible exchange rates is that they insulate output better from real shocks, stock tips because the exchange rate can adjust and stabilize demandfor domestic goods through expenditure switching. This argument is weakened in models with high foreign currency debt and low exchange rate pass-through toimport prices. The present study evaluates the empirical relevance of these two
actors. A floating exchange rate or fluctuating exchange rate is a type exchange operator trading tip rate regime wherein a currency’s value is allowed to fluctuate according to the
foreign exchange stock market. A currency that uses a floating exchange rate is known as a floating currency. There are economists who think that, in most circumstances,
trading tips floating exchange rates are preferable to fixed exchange rates. As floating exchange rates automatically adjust, they enable a country to dampen the impact of shocks and foreign business cycles, trading strategies and to preempt the possibility of having a balance of payments crisis.

This may not necessarily be true considering the results of countries that attempt to keep the prices of their currency “strong” or “high” relative to others, share tips such as the UK or the Southeast Asia countries before the Asian currency crisis. The debate of making a choice between fixed and floating exchange rate regimes is set which argues that an economy cannot simultaneously maintain a fixed exchange rate, trader free capital movement, and an independent monetary policy. It can choose any two for control, and leave third to the stock market tips forces. In cases of extreme appreciation or depreciation, a central bank will normally intervene to stabilize the currency. Thus, trading strategies exchange rate regimes of floating currencies may more technically be known as a managed float. A central bank might, for instance, allow a currency price to float freely between an upper and lower bound, a price “ceiling” and “floor”. Management by the central bank may take the form of buying or selling large lots in order to provide price support or resistance, in the case of some national currencies, stock market tips there may be legal penalties for trading outside hese bounds. Unlike the fixed rate operator share tips a floating exchange rate is determined by the private market through supply and demand. A floating rate is often termed “self-correcting”, as any differences in supply and demand will automatically be corrected in the market.

Take a look at this simplified model if demand for a currency is low, its value will decrease, thus making imported goods more expensive and stimulating demand for local goods and services. This in turn will generate more jobs, tock trading causing an auto-correction in the market. A floating exchange rate is constantly changing. In reality, stock market no currency is wholly fixed or floating. In a fixed regime, market pressures can also influence changes in the exchange rate’ central bank will often then be forced to revalue or devalue the official rate so that the rate is in line with the unofficial one, insider information thereby halting the activity of the black marketing a floating regime sure short tips the central bank may also intervene when it is necessary to ensure stability and to avoid inflation however it is less often that the central bank of a floating regime will interfere. From then on, major governments adopted a floating system and all attempts to move back to a global peg were eventually abandoned in 1985. Since then operator stock trading tips no major economies have gone back to a peg, and the use of gold as a peg has been completely abandoned.

Forex Trading Articles

Trading Tips- That You Need to Become a Successful Forex Trader

Foreign exchange currency trading method is still one of the greatest ways to make wealth from the ease of your home, and that’s why Foreign exchange currency trading system is the best option to learn the fundamentals of trading. Traders generally take their decision with the help of two type of information such as external factor and internal factor. Some traders follow the fundamental factor in their trading while some follows the ups and downs in their trade.

Let’s discuss the 4 important tips that help you to succeed in Forex trading:

Try to learn more:

The more you will learn, so more you can earn. When it comes to trade on foreign exchange currency you need to be well informed about the market condition. Therefore learning trends and charts help you get the more and more knowledge of market.

Reading Trading Tips Is Not Research:

One of the biggest problems with the available market software is to know whether they are providing information according to the current market condition or not. So it is better for you to find the market information by yourself only.

Try to experiment with your trade:

Experiments are the key to success when it comes to Foreign exchange currency trading system. Traders who are constantly using the same track of trading they don’t lose their money but however they even don’t earn too much. That’s why you need to always invent some unique best trading strategies but don’t invest too much in any trade.

Don’t bound to create Quick Money:

In Foreign exchange currency trading there is nothing called quick money. If somebody is creating money quite easily, then probably they have some big experience in Forex trading. Don’t use your whole account in the same transaction because if the market goes down then have to suffer from big loss, therefore try to protect your investment from future uncertainties.

Keep your trading strategy simple:

Forex market does not need any complicated math; therefore you have to pay attention in simple trading tips that can make you a winning trader. You don’t need to listen to any other traders, if you want some information about forex trading then there are several websites are available which gives the complete knowledge of forex trading.

Forex Trading Articles

FX Trading For Beginners

The foreign currency exchange market, also known as forex or FX, is the largest financial market in the world in terms of volumes traded. Forex is a global market that does not have a single geographical, financial or regulatory centre. It operates on a 24-hour-a-day basis and is closed only at the weekend. FX traders attempt to correctly anticipate increases or decreases in the value of one currency as measured against another.

FX prices are always quoted in a pair and forex trading is essentially the purchase of one currency and the simultaneous sale of another. Some of the most commonly traded FX pairs are the Euro against the US Dollar (EUR/USD), the Euro against the British Pound (EUR/GBP), the British Pound against the US Dollar (GBP/USD) and the US Dollar against the Japanese Yen (USD/JPY).

The currency quoted first in the pair is the so-called base currency. The second quoted currency is the variable; a GBP/USD price of 1.605 means that 1 is equal to $1.605.

FX spread betting involves speculating on price movements of a particular currency pair. It is a type of derivative trading, which means you do not actually own the underlying currencies.

Instead, FX spread betting involves price movements that translate into points; a particular currency movement translates into a point movement, up or down.

The total profit or loss from spread betting is calculated by the number of points, up or down, and if this increase/decrease was correctly anticipated. That difference is then multiplied by your trade size. FX spread betting uses leverage, meaning the total points movement is magnified in terms of financial value. This can result in amplified profits and losses.

FX Resources

Typically, economic data includes: national unemployment figures, updates on government budgets, surpluses or deficits and official speeches. Any of these can affect currency prices and it is essential to factor such information into your trading strategy.

FX trading resources can help keep you on top of the market, supply you with background information, trading news, third party analysis and economic data. In order to start trading FX, you can apply for an account with an FX broker or spread betting company like Financial Spreads.

FX brokers offer different types of accounts, prices and terms and conditions. They also occasionally offer promotions such as special deals, free offers and packages. A common feature of many FX trading accounts is a charting package, these can help you understand FX by depicting price movements over a period of time. Information and news resources are sometimes part of an account package

You can also get third party research, analysis, trading tips, market overviews and insights. Seminars and training sessions can also be helpful. Note that some third party research and analysis is free but you’ll normally have to pay for the better quality reports.

Spread betting does involve a high degree of risk to your funds and you can lose more than your initial stake. Please ensure that it matches your investment requirements as it might not be suitable for all classes of investor. Before making any trades, make sure that you fully appreciate the risk. Only spread bet with funds that you can afford to lose. Obtain independent financial advice if necessary.

Forex Trading Articles

EToro Partners – A New Approach to Forex Affiliation

For as long as there has been online forex trading there have been forex affiliates. Just like traditional forex software ignored the fact that the online medium offers great possibilities for user friendly design that appeals to a new public of traders, so did the forex affiliate programs ignore the fact that forex affiliation is different from any other kind of affiliation. The standard methods used in online gaming wouldn’t work on forex traders since it is a completely different consumer demographic.

Then along came eToro. Not only has eToro revolutionized the forex trading industry by introducing a visual and simplified forex software that quickly became the most popular forex trading platform online, but eToro has also established eToro Partners – a forex affiliates program that would recognize the specificity of promoting a forex platform and create innovative tools to appeal to forex traders.

eToro partners has several major advantages over the competition. First and foremost, eToro’s affiliates promote the eToro platform, which in itself guarantees tremendously high conversion rates. The eToro platform is designed to appeal both to novice and to professional traders with its unique graphic trading interfaces, thus its target audience is particularly wide.

One of the more important characteristics of an affiliate program is its commission plans. eToro offers several commission plans including CPA and RevShare plans. These plans are there to provide the affiliate with the opportunity to make the most of his or her traffic. If your traffic is made up mostly of novice traders, then you’re likely to make more commissions with the CPA plan. If on the other hand your traffic is already familiar with forex they are likely to generate more affiliate profits on the RevShare plan.

All of eToro’s commission plans also include a 2nd tier plan which guarantees affiliates revenues from the traders referred by their referred affiliates. Not only that, but since eToro Partners is aware of the profit opportunity hidden in 2nd tier commissions, eToro Partners provides affiliates with special marketing tools targeting future potential affiliates as opposed to just traders. These tools bring the eToro Partners program to the traders’ attention and make them likely to bring in a lot more commissions.

As for trader marketing tools, eToro Partners provides its affiliates with original creative banners, ads and landing pages to draw your visitors’ attention. EToro Partners also provides forex widgets for your websites, so you can easily add dynamic content to your page that at once informs your site’s traffic of the latest forex market stats and news and refers them to eToro. Marketing tools are also available in various languages which enable affiliates to localize their campaigns and to take advantage of local traffic.

To optimize affiliates’ campaigns, eToro offers accurate and relevant affiliate analysis tools that show affiliates their referral statistics. With these professional forex affiliation tools, anyone can easily become a forex affiliate and enjoy a cut of the forex market’s rising popularity. The eToro Partners team is also more than willing to work closely with affiliates to make sure that the affiliate gets the most out of the partnership and the most out of the opportunities presented by the forex market and the revolutionary eToro platform.