Saturday, April 11, 2009
Three Reasons Why Forex Trading Is Great
Forex ultimate trading 2009
Investopedia explains Money Market
Foreign Exchange Exposures
Forex Market
Honest Forex Maestro Review
Winning Tips For Online Currency Trading
Thursday, April 9, 2009
China Talks Tough with Call to Dump Dollar
Just over one week before President Barack Obama and other world leaders meet in London for a summit focusing on the , China is making clear it wants a greater say in managing economic policies worldwide. The latest blast from Beijing: a call by China's top central banker to dump the U.S. dollar as the world's most important currency. People's Bank of China Governor Zhou Xiaochuan, in a paper released on the bank's Web site on Mar. 23, called for a new "super-sovereign reserve currency" to replace the current reliance on the dollar. The goal, Zhou writes, is to "create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run."
Not surprisingly, U.S. officials aren't welcoming the idea. Speaking on Mar. 24 at a congressional hearing in Washington, Treasury Secretary and Federal Reserve Chairman both said they categorically oppose the change.
And pretty much everyone agrees it's not going to happen. In his paper, Zhou called for using the International Monetary Fund's "special drawing right" (SDR) currency, now used mainly for accounting purposes by the Washington-based organization, and pegged to the euro, pound, yen, and dollar. To succeed, the new currency would also have to be adopted worldwide by private companies for international trade transactions, a tremendous challenge. "Denominating trade and investment is almost always done in terms of one currency—and making the SDR work like that is almost impossible to imagine," Stephen Green, research chief of Shanghai-based Standard Chartered China wrote in an e-mail to BusinessWeek.
Seeking More Say
How then to read Zhou's roiling of the financial waters? It's most likely a shot across the bow signaling China's intention to have a greater voice in world financial affairs. When he attends the G-20 opening on Apr. 2, Chinese President Hu Jintao is almost certain to call for expanding China's voting rights at the IMF. Presently the members of the European Union have a combined 32% of voting rights and the U.S. has 17%, compared with only 3.7% for China and 1.9% for India. Beijing, too, may offer to purchase up to $100 billion of any IMF-issued new bonds, a People's Bank of China vice-governor suggested in a press conference in Beijing on Mar. 23.
By calling for a super-sovereign reserve currency, Zhou signals China's dissatisfaction with the global economic pecking order. As well as demonstrating Beijing's new more assertive role in the world economy, Zhou's proposal to replace the dollar may also signal China's intention to move more aggressively to diversify its foreign exchange holdings. Zhou's paper contains a "hint of a threat that the U.S. should not take the dollar's privileged status for granted," Mark Williams, international economist at Capital Economics in London, wrote in a Mar. 24 report.
The central banker's controversial proposal is the latest in a series of moves signaling Chinese irritation with the U.S. For instance, Premier Wen Jiabao on Mar. 13 told reporters he was "worried" about the value of China's massive dollar holdings. Standard Chartered Bank (STAN.L) estimates that China, the world's largest holder of U.S. debt, held $1.45 trillion in U.S. securities at the end of 2008, out of a total $1.9 trillion in foreign reserves. As the starts spending $787 billion to boost the U.S. economy and another $1 trillion on its cash-strapped banks, Beijing is worried inflation in the U.S. could erode the value of its dollar holdings. During the Mar. 13 press conference broadcast live across China, Wen called on the U.S. to take efforts to "maintain its good credit, to honor its promises, and to guarantee the safety of China's assets."
Despite Zhou's bold proposal, Beijing also knows that any rapid move toward a new reserve tender could backfire for China. That would erode the value of China's dollar holdings and likely would lift the value of the yuan, China's currency, making the country's already beleaguered export sector even less competitive. "To the extent that its concern is that dollar weakness will undermine the value of its existing reserves, it clearly has no desire to precipitate such a shift by moving out of dollar assets," wrote Williams of Capital Economics. "Zhou is well aware that the dollar's position is secure for now." Indeed, the same day Zhou called for the new reserve currency, China's State Administration of Foreign Exchange issued a statement that it supported the dollar and would continue buying U.S. Treasuries.
3rd UPDATE:Citic Pacific Hit By FX Trades; Chmn Vows Rebound
Citic Pacific Ltd.'s (0267.HK) foreign exchange scandal pushed it to a full-year loss of HK$12.66 billion (US$1.62 billion), but the conglomerate says it will return to profitability in 2009.
Daily Technical Strategist: GBPUSD
This is an excerpt from FXT Technical Strategist Plus, a 7-currency model analysis. Take A One Week Free Trial here Premium Plus
This report is prepared solely for information and data purposes. Opinions, estimates and projections contained herein are those of FXTechstrategy.com own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which FXTechstrategy.com incurs any responsibility. FXTstrategy.com does not accept any liability whatsoever for any loss arising from any use of this report or its contents. This report is not construed as an offer to sell or solicitation of any offer to buy any of the currencies referred to in this report. 3rd UPDATE:Citic Pacific Hit By FX Trades; Chmn Vows Rebound
Forex vs. Futures
The origins of today's futures market lies in the agriculture markets of the 19th century. At that time, farmers began selling contracts to deliver agricultural products at a later date. This was done to anticipate market needs and stabilize supply and demand during off seasons.
The current futures market includes much more than agricultural products. It is a worldwide market for all sorts of commodities including manufactured goods, agricultural products, and financial instruments such as currencies and treasury bonds. A futures contract states what price will be paid for a product at a specified delivery date.
When the futures market is played by speculators, the actual goods are not important and there is no expectation of delivery. Rather, it is the futures contract itself that is traded as the value of that contract changes daily according the market value of the commodity.
In every futures contract there is a buyer and a seller. The seller takes the short position and the buyer takes the long position. The futures contract specifies a buying price, a quantity and a delivery date. For example: A farmer agrees to deliver 1000 bushels of wheat to a baker at a price of $5.00 a bushel. If the daily price of wheat futures falls to $4.00 a bushel, the farmer's account is credited with $1000 ($5.00 - $4.00 X 1000 bushels) and the baker's account is debited by the same amount. Futures accounts are settled every day.
At the end of the contract period, the contract is settled. If the price of wheat futures is still at $4.00 the farmer will have made $1000 on the futures contract and the baker will have lost the same amount. However, the baker now buys wheat on the open market at $4.00 a bushel - $1000 less than the original contract, so the amount he lost on the futures contract is made up by the cheaper cost of wheat. Similarly, the farmer must sell his wheat on the open market for $4.00 a bushel, less than what he anticipated when entering the futures contract, but the profit generated by the futures contract makes up the difference.
The baker, however, is still in effect buying the wheat at $5.00 a bushel, and if he hadn't entered into a futures contract he would have been able to buy wheat at $4.00 a bushel. He protected himself against rising prices but he loses if the market price drops.
Speculators hope to profit by the daily fluctuations in the futures market by buying long (from the buyer) if they expect prices to rise or by buying short (from the seller) if they expect prices to fall.
FOREX
The foreign exchange market (FOREX) has several advantages over the futures market. FOREX is a more liquid market – as the largest financial market in the world it dwarfs the futures market in daily exchanges. This means that stop orders can be executed more easily and with less slippage in the FOREX.
The FOREX is open 24 hours a day, 5 days a week. Most futures exchanges are open 7 hours a day. This makes FOREX more liquid and allows FOREX traders to take advantage of trading opportunities as they arise rather than waiting for the market to open.
FOREX transactions are commission-free. Brokers earn money by setting a spread – the difference between what a currency can be bought at and what it can be sold at. In contrast, traders must pay a commission or brokerage fee for each futures transaction they enter into.
Because of the high volume of trading FOREX transactions are almost instantly executed. This minimizes slippage and increases price certainty. Brokers in the futures market often quote prices reflecting the last trade – not necessarily the price of your transaction.
The FOREX is less risky than the futures market because of built-in safeguards in the trading system. Debits in futures are always a possiblility because of market gap and slippage.Online Currency-Trading Sites Multiply
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Friday, April 3, 2009
Forex Market
STARTINg FOREX!
Only national banks, multi-national corporations and other large players used to have an unlimited access to foreign exchange recently. 1980's gave birth to new rules that have established margin accounts making participation possible even for small investors. Forex has gained its popularity thanks to margin accounts. Having a $1,000 investment and 100:1 margin accounts you get an access to $100,000 funds.
A reputable broker is usually required for Forex traders to carry out their transactions. CFTC (the Commodity Futures Trading Commission) registers such reputable broker as FCM (a Futures Commission Merchant). Lots of beginner traders often make 2 following mistakes: starting their trading without having a strategy and trading lead by emotions. It happens when you, having just bought and watching the rate decline, start panic and rapidly sell just to see the following market growth. Be sure to lose your money trading like this. Profitable Forex trader has an adequate strategy and doesn't let his emotions deal with trading.
Forex trader requires good education concerning movements of the market as well as different kinds of orders to carry out his trade with maximum profit and minimum risk.
Understanding the market along with the forces affecting it is the first step to becoming a successful trader. You can base trading strategies on this knowledge for successful usage in your trading.
Forex has 5 most important groups participating in the trades: Banks, Governments, Corporations, Investment Funds, and traders. Traders are the only group that doesn't have an external control having only themselves to report to. A margin agreement, conducted during establishing Forex account includes the statement that any trades which the broker considers too risky may be interfered by him. You may start your trading after establishing your Forex account.
There are various kinds of accounts offered by brokers. Standard deposit depends on the broker but is generally from $1000 to $2000 however there are mini accounts that let you in having only $200. Leverage can also be different. You get an access to higher amount of money with higher leverage possessing the same investment.
You can find out how various software tools and the system in general work by using demo accounts. They are strongly recommended to be used for every newbie Forex investor.
There are some tools that are common to all brokers despite each broker has its own software. These common tools that you can expect to see practically in any broker's software are: news feeds, real time quotes, technical analyses and charts, analyses of profit and loss.

