Currency Trading

When foreign exchange has become number one online business in the world, many people will join this business. Many people are involved in this trading. Foreign exchange is actually just like common currency trading, but with special features, foreign exchange usually using special platform software that use to read signal, graphic and also calculation. For beginners, I am sure this is very difficult.
For some beginners, they tend to rely on broker. This broker will manage their capital in currency trading. Trusting broker may be very risky, because you let them to take care of your money. To avoid that, it can be useful if you can manage your own money, because it will be very secure. If you still confuse how to use the foreign exchange platform you should download new one in etoro.com. This is website that provide real and easy platform program to be used even for beginners. In currency trading, there will be lot of graphic and calculation that cannot be understand easily, but if you use this program, all that impossible become possible. In the website explained that everyone can use this program. By single click and button, you can have many results.
With this program, you can do currency trading on your own. You may not need broker service anymore, because you can do it yourself. In the website you can read, why this program is beneficial?, it said that this website has friendly interface, ability to update financial information every time, easy understanding for graphic and calculation, and also chat capability.
Before you involve in currency trading, it is better for you to practice. With this program, you can use real-time processing but with virtual money. You won’t loose anything except get more experience. Now you have chance to be mater for currency trading. Start your trading activity right now before you loose your time., download the program and earn more money.

Interest rates, swap rates and forward rates

Many people, even in the financial sector think that a forward rate is an expectation or forecast of a future foreign exchange movement. This is a big mistake. Actually, a forward rate is nothing else but a mirror of the currently prevailing spot rate, allowing for the interest rate differential between the two currencies and the time period at the expiration of which the actual transaction will be concluded. So the spot rate is adjusted by the so called swap rate to give the forward rate. For the unsophisticated investor it is enough to say that the swap rate is there to compensate the low interest currency holder for the time period involved in a forward transaction. The best way to explain these strange sounding terms is an example. We shall keep the simplistic approach and will not get involved here with FX rate spreads and interes rate spreads. Suppose person X buys $ 100,000 against Dmarks from bank B at spot rate 1.5000 for value 30 days forward. Furthermore let us assume that the dollar interest rate for this period is 5% and for the mark 3%. This means that during these 30 days A will earn interest on the marks he keeps until delivery and B will earn interest on the dollars for the same reason. The forward rate must allow for the compensation of A so that on balance no party is better or worse off. Investor A will receive interest in marks= (150,000x3x30)/36,000 = 375. On the other hand bank B will receive interest in dollars = (100,000x5x30)/36,000 = 416.67. This dollar amount calculated by prevailing spot rate 1.5000 is equivalent to 625 marks. It is evident that bank B has to compensate investor A through the forward rate, i.e. A will pay a lower price for the dollars he is buying forward to equalise the difference of 250 marks. Through a formula we can reach the swap rate 0.0025 This is subtracted from 1.5000 and the forward rate 1.4975 prevails. Indeed, the investor will finally deliver 149,750 marks to receive 100,000 dollars.

FX market and Money market

The last issue to be discussed in this brief walk is the non-difference between two markets that are the flip side of each other. We have already mentioned earlier that a swap rate is basically based on interest rate differentials. We have also explained in the previous paragraph the nature of a swap transaction. The investor who uses marks bought in the forward market to buy German bonds has another option. He can place his dollars on deposit and borrow from the bank the marks he needs.Hence, he will have a dollar deposit and a mark loan. Indeed, the interest between what he gets and what he pays is also expressed through the swap rate Therefore, both ways lead to the same result. The only advantage going though the foreign exchange market rather than through the money market is simplicity i.e. usually it is faster and easier to obtain an FX facility rather than obtaining a loan, even one based on a collaterilised deposit.

Trading Platforms

Our FOREXTrader platforms combine ease of use, unprecedented flexibility and a full suite of professional charting and order management tools, all on a single screen. Best of all, you can use the same User ID and Password to switch between platforms at will, putting you in total control of your trading experience.View real-time prices in 37 currency pairs and spot goldExecute market orders with just one mouse clickTrack P&L and open positions in real timePerform technical analysis with our advanced charting toolChoose from 8 available order typesAccess a full suite of proprietary daily and weekly research reportsView up to the minute news headlines and market commentary

Forex markets - trading internationally

Forex market trading is trading money, currencies worldwide. Most all countries around the world are involved in the forex trading market, where money is bought and sold, based on the value of that currency at the time. As some currencies are not worth much, it is not going to be traded heavily, as the currency is worth more, additional brokers and bankers are going to choose to invest in that market at that time.Forex trading does take place daily, where almost two trillion dollars are moved every day - that is a huge amount of money. Think about how many millions it does take to bring about a total of a trillion and then consider that this is done on a daily basis - if you want to get involved in where the money is, forex trading is one ’setting’ where money is exchanging hands daily.The currencies that are traded on the forex markets are going to be those from every country around the world. Every currency has it own three-letter symbol that will represent that country and the currency that is being traded. For example, the Japanese yen is the JPY and the United Stated dollar is USD. The British pound is the GBP and the Euro is the EUR. You can trade within many currencies in one day, or you can trade to a different currency every day. Most all trades through a broker, or those any company are going to require some type of fee so you want to be sure about the trade you are making before making too many trades which are going to involve many fees.Trades between markets and countries are going to happen every day. Some of the most heavily trades occur between the Euro and the US dollar, and then the US dollar and the Japanese yen, and then of the other most often seen trades is between the British pound and the US dollar. The trades happen all day, all night, and thought out various markets. As one country opens trading for the day another is closing. The time zones across the world affect how the trading takes place and when the markets are open.When you are making a transaction from one market to another, involving one currency to another you will notice the symbols are used to explain the transactions. All transactions are going to look something like this EURzzz/USDzzz the zzz is to represent the percentages of trading for the percentage of the transaction. Other instances could look like this AUSzzz/USD and so on. When reading and reviewing your forex statements and online information you will understand it all much better if you are to remember these symbols of the currencies that are involved.

Our advantages

From 1971, the existent owners of this market had been banks, multinational corporations, and leading brokers. If a person wanted to invest capital into this market, he/she would have to do it with a bank, about 1 mln. US Dollars in accordance with the requirement of 5-10 mln. US Dollars of the accepted deal value. Brokers could reduce the minimum deposit in average to 0.250 mln. US Dollars. But nowadays Forex market is open for investors with minimal funds. In contrast to huge amounts earlier requested by banks and brokers, significantly reduced marginal requirements finally became available to many people, and know allow every person to play with "big sharks". Besides, small investors can use the Internet advantages what made this market as available as it used to be for big players. Now, when I better understand what is Forex, why should I choose Akmos Trade?We have been working at Forex market for more than 13years, and being one of the oldest companies in this field. We were first in Russia to provide full-scale access to Forex market through Internet.Technical level and equipment of Akmos Trade Dealing Center provides you with 24–hour connection to global Forex market and the most effective access to market from any location of the world with a help of Internet.Minimum deposit amount allows you to enter the market at minimum cost. It's worth noting that the more funds you use, the more potential and market flexibility you have.Zero charge speaks for itself.You can open your own demo account, and test your trader's skills for free.Want to know more? See general terms. Want to try? Open free demo account. Confident of success? Open real account and earn money with currency movements.

BID and ASK prices

It's understood that any transaction is executed at exact price, while Quote Spread Sheet table has three prices for each price, e.g.:

Each Forex market participant in each transaction acts as either SELLER of the currency, or BUYER. And the seller offers the higher price, e.g. GBPUSD at 2.0254, and the buyer asks the lower price, e.g. GBPUSD at 2.0250. Thus, the offer price à seller is called ASK, and he price of buyer — BID. Consequently, if you assume GBPUSD will appreciate (your chart shows that GBPUSD curve goes higher), than you decide to buy pound while its cheaper, in order to sell it higher. You can buy (this operation is called BUY) only from the seller who will offer it at ASK price. When you sell pound (this operation is called SELL), the buyer will offer for it BID price (it works for all currencies). This clearly implies that if you OPENED position (the operation is called OPEN), i.e. executed BUY GBPUSD, and want to CLOSE it right away (the operation is called CLOSE), i.e. to sell the just bought pounds, you can make it only with the loss equal to the one in any foreign exchange office. Consequently, in order to get profit, the move of the currency price in the desired direction should exceed the difference between BID and ASK. The third value is called LAST — it represents the average value between the last BID and ASK at Forex market. As stipulated in Section 3, only currencies with the direct quote appreciate when charts go higher. It's evident that the rule, under which the BUY operation during move higher brings profit for some currencies and loss for others, will be inconvenient. Thus, upon execution BUY operation for reverse quote currencies, you buy not the currency, but US Dollar, and the currency is sold. For example, BUY USDCHF at 1.1724 buys 100,000 US Dollars at 117,240 Swiss Franks. Thus, BUY operation always brings profit when the chart moves up, and SELL operation — when chart moves down. To sum up, OPEN BUY (up) executes at ASK price, and CLOSE — at BID price; OPEN SELL (down) — at BID price, and CLOSE — at ASK price. Sometimes the quotes can be shown in pair, e.g. 114.88/92. Such form of notation reflects the BID/ASK pair. First, the BID value is written, and then the last two numbers of ASK quote. Knowing that ASK exceeds BID, and that the difference between them is more than 100 points, you can always explicitly determine the value of second quote. In this case ASK = 114.92.

What is Forex

Forex is an interbank market that was created in 1971 when international trade transitioned from fixed to floating exchange rates. Since then the rates of currencies relative to each other are determined by the most obvious means which is the exchange at a mutually agreed rate. This market surpasses the others in its volume. For example, the daily turnover of world equity market is estimated at $300 billion, while Forex approaches 1 to 3 trillion US dollars a day. However, Forex is not a market in a traditional sense. It doesn't have a fixed location of the trading floor as, for example, shares or currency futures market does. The trading is done over the telephone and at the computer terminals in thousands of banks around the world simultaneously. Besides, futures and stock markets have one significant difference, and, at the same time, restriction — the trade is interrupted at the day end and resumes only next morning. And if you trade in the Russian market, and some significant events happen in the USA, the market open may differ from your expectations. Forex market is open 24 hours a day, and currency exchange operations continue during the whole working week. There are dealers willing to quote the currency practically in every time zone (London, New York, Tokyo, Hong Kong, Sydney etc.). Want to know more? See general terms. Want to try? Open free demo account. Confident of success? Open real account and earn money with currency movements.

Who trades currencies, and why?

Daily turnover in the world's currencies comes from two sources:
Foreign trade (5%). Companies buy and sell products in foreign countries, plus convert profits from foreign sales into domestic currency.
Speculation for profit (95%). Most traders focus on the biggest, most liquid currency pairs. "The Majors" include US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. In fact, more than 85% of daily forex trading happens in the major currency pairs.

The world's most traded market, trading 24 hours a day

With average daily turnover of US$3.2 trillion, forex is the most traded market in the world. A true 24-hour market from Sunday 5 PM ET to Friday 5 PM ET, forex trading begins in Sydney, and moves around the globe as the business day begins, first to Tokyo, London, and New York. Unlike other financial markets, investors can respond immediately to currency fluctuations, whenever they occur - day or night.

What's Forex?

"Forex" stands for foreign exchange; it's also known as FX. In a forex trade, you buy one currency while simultaneously selling another - that is, you're exchanging the sold currency for the one you're buying. The foreign exchange market is an over-the-counter market. Currencies trade in pairs, like the Euro-US Dollar (EUR/USD) or US Dollar / Japanese Yen (USD/JPY). Unlike stocks or futures, there's no centralized exchange for forex. All transactions happen via phone or electronic network.

Forex API / Automated Trading

For traders interested in utilizing an automated trading system or developing their own black box strategy, FOREX.com supports fully automated trade execution via a proprietary API.
The API provides users with the ability to receive a real-time rate feed, submit trade requests, set and modify stop-loss and take-profit orders, and receive automated confirmations of trade activity.
For qualified users, we provide a testing environment that enables developers to "paper trade" and test their systems in real time before using the API in a production environment with actual funds.
FOREX.com’s API is a true standards-based XML interface that can be programmed in any network accessible language, from Perl-script to C++, Excel Macro to VB.NET managed code. The API is comprised of two separate technologies:
1. Rate Data InterfaceRate data represents the tradable prices published to the client. For this role we use a direct TCP/IP socket interface to the price publication system. To assist with programming in Visual Studio.NET and JAVA, we provide native components that handle the connection and link management. Each component creates events through delegates or call backs as appropriate.2. Trading FunctionsThe trading functions are initiated by the client in the form of a request. This logic is implemented using Web Services; an XML based SOAP interface that uses HTTP as its transport. Web Services have become the de-facto B2B protocol of choice through their ease of use and cross-platform portability.
For those clients looking to automate their strategy signals generated from scripting languages such as eSignal's Formula Script or TradeStation's EasyLanguage®, please click here.The API is available free-of-charge to FOREX.com live trading clients. We allow interested parties to register and access our API User Forum. Qualified developers have the ability to test the API with no up front monetary investment.
Getting Started
1.
Register For the API ForumHere you may view API documentation, exchange ideas, share comments and post information with other API users.
2.
Request an API Demo Account From the API Forum
3.
Complete the Account Application ProcessNo deposit is required; however, we ask you to provide us with your projected initial deposit.
4.
Develop Your APIYou can begin to program against the API and test your code using real-time data in a demo environment.
5.
Fund your live trading account and begin using the API in the production environment

Pricing

At FOREX.com, you pay no commissions to trade. Your only transaction cost is the dealing spread - the difference between the bid and the ask price. Trade on spreads as low as 1-2 pips for most major currency pairs, backed by our commitment to deliver the best possible execution on every trade. Tighter spreads save you money
Dealing Spreads
Pair
As low as
Pair
As low as
EUR/USD
1.6
NZD/USD
1.3
USD/JPY
1.6
CHF/JPY
2.5
USD/CHF
1.8
CAD/JPY
3.5
EUR/GBP
0.7
AUD/JPY
4
EUR/JPY
1.8
NZD/JPY
4
EUR/CHF
1
GBP/JPY
3.3
GBP/USD
1.8
GBP/CHF
4
USD/CAD
1.8
EUR/AUD
4
AUD/USD
1.8
EUR/CAD
3.5
AUD/NZD
4.5
AUD/CAD
2
GBP/CAD
3.5
GBP/AUD
4.5
EUR/NZD
7.5
GBP/NZD
1.7
AUD/CHF
5.5
NZD/CHF
6
NZD/CAD
7.5

CAD/CHF
6
USD/HKD
3.3

USD/SGD
5
SGD/JPY
4.5

USD/NOK
21.5
USD/SEK
21

USD/DKK
7.5
EUR/NOK
21.5

EUR/SEK
21.5
EUR/DKK
4

Access even tighter spreads with FOREXProJoin our active trader program to access our tightest available spreads, plus premium forex trading tools and specialized service. Learn more about FOREXPro. Market driven pricing, with fractional pips for more precise quotingWith fractional pip pricing, our real-time executable prices are quoted in more precise 0.1 pip increments. This extra digit of precision allows you to take advantage of smaller price movements. FOREX.com's pricing is market driven; our proprietary rate engine aggregates prices from our institutional trading partners and publishes real-time quotes to our customers. Because these quotes are derived directly from interbank prices, our dealing spreads reflect available forex market liquidity.Sign up for a free 30-day practice account to familiarize yourself with our pricing and execution capabilities as well as all the features of the trading platform, including real-time charts, tools and research.

Introduction To Forex Trading

There are many markets: markets for stocks, futures, options and currencies. These are probably the most accessible markets for everyday traders like you and I. People easily understand the basics of trading shares, so I will occasionally use examples from that market.

I began trading shares first and then I moved on to trading currencies; therefore, most of the examples I will be using in this book are derived from trading currencies.

If you do not know a lot about currency trading, allow me to introduce it to you. It is what I trade and I believe that it is one of the best markets to trade because of its efficiency. The transaction costs to execute a trade are minimal and most brokers provide you with the tools and data you need to make your trading decisions, they usually provide them for free. The market is open 24 hours a day which allows you to design your trading hours around your daily commitments. It is very volatile, which is great for those people who are looking for day-trading opportunities.

The foreign exchange market is the market in which currencies are bought and sold against one another. People may loosely refer to this market under different labels, including foreign exchange market, forex market, fx market or the currency market.

The foreign exchange market is the largest market in the world, with daily trading volumes in excess of $1.5 trillion US dollars. All transactions involving international trade and investment must go through this market because these transactions involve the exchange of currencies.

It is the most perfect market that exists because it has a large number of buyers and sellers all selling the same products. There is a free flow of information and there are little barriers to participate.

The currency exchange market is an over-the-counter (OTC) market which means that there is not one specific location where buyers and sellers can actually meet to exchange currencies. Instead, transactions are conducted by phone, fax, e-mail or through the websites of brokers who specialize in currency trading.

The major dealing centres at the time of writing are: London , with about 30% of the market, New York , with 20%, Tokyo , with 12%, Zurich , Frankfurt, Hong Kong and Singapore , with about 7% each, followed by Paris and Sydney with 3% each. Because of the fact that these centres are all over the world, foreign exchange traders can execute transactions 24 hours a day. The market only closes on the weekends.

THE MAIN ‘PLAYERS' IN THE FOREX MARKET

The five broad categories of participants are: consumers, businesses, investors, speculators, commercial banks, investment banks and central banks.

Consumers, including visitors of countries, tourists and immigrants, do need to exchange currencies when they travel so that they can buy local goods and services. These participants do not have the power to set prices. They just buy and sell according to the prevailing exchange rate. They make up a significant proportion of the volume being traded in the market.

Businesses that import and export goods and services need to exchange currencies to receive or make payments for goods they may have bought or services they may have rendered.

Investors and speculators require currencies to buy and sell investment instruments such as shares, bonds, bank deposits or real estate.

Large commercial and investment banks are the ‘price makers'. They are the ones who buy and sell currencies at the bid-and-offer exchange rates that they declare through their foreign exchange dealers.

Commercial banks deal with customers on one hand, and with the Interbank or other banks, on the other hand. They profit by utilizing the bid-and-offer spread. The bid price is the exchange rate that the buyer is willing to buy and the offer price is the exchange rate at which the seller is willing to sell. The difference is called the bid-offer spread. They also make profits from speculating about whether the exchange rate will rise or fall.

Central banks participate in the foreign exchange market in their effective duty as banks for their particular government. They trade currencies not for the intention of making profits but rather to facilitate government monetary policies and to help smoothen out the fluctuation of the value of their economy's currency.