forex market

Currency Valuation and its effect on Forex market

Currency valuation is the setting the exchange rate of a nation’s currency. It is very important as the national government can influence the price rate of the government currency to make some important decisions like boosting their international export and also to lessen the foreign debts sometimes.

We are going to give you some example how a change in currency valuation can affect the Forex market and also the international trade. Remember that when we are talking about Forex market, we are not talking about only Foreign Exchange market, we are also talking about the international financial and investment market and agreements.

Boosting exports by devaluing currency

One of the classic example how a fall in the price of a national currency is the sale of European cars to the US markets. Many US citizens use cars which are made in Europe and imported to the United States. If the European Union devalues their currency, it means the value of Euro will fall against the dollar and people can buy less expensive cars in the US. This is one strategy how countries devalue their national currency to export imports.

What is effect will this devaluation have in Forex? The first effect will be that the Forex market will be volatile. Euro and US Dollar are the two most traded currency pair of the Forex industry. When the price of the Euro falls, it haves an impact on Forex industry as well. Though European government may only devalue their currency for fostering their imports, it will have an effect on the investment and Forex world.

Making the market volatile

Though not all of these currency valuations are taken by pre-measured steps in Forex trading industry, sometimes there are events which may happen to change the value of the national currency. For example, if there is a country experiencing Hyperinflation which has happened in Zimbabwe, they will have more volatility in the market. These volatile markets are one way of making money, but they are also a market to lose your money. You can trade the market from Singapore but still, you will easily experience the impact of global economic change. Many traders in Singapore of consider this as the essential part of trading. In fact, it is true since these major changes of the strength of a certain currency create a high level of volatility in the Forex industry. And if you know the perfect way to do the market analysis then market volatility will be your best friend.

Have you really understood what we want to say?

We have doubts if you really have understood our intellectual discussion. To keep things simple, remember this is a very hard thing to digest and we do not expect you will understand it from top to bottom. As you trade the market, you will see that change in currency valuation is bad for Forex and traders to like to trade in a more stable currency valuation market. Being a currency trader you need to trade with a stable currency pair. For this reason, many Singaporean traders only trade the major pairs. It’s true that the synthetic pair often offers great profit taking opportunity but in the long run, their price evaluation can never be measured with a standard scale. The fluctuation is so high that any trader can lose a huge amount of money in a fraction of a second.

Summary: Currency trading is one of the most difficult tasks in today’s world. But once you learn the perfect way to assess the strength of the economic performance of a certain country, you will see things are a lot easier for you. This type of assessment is often known as fundamental analysis. So make sure that you have solid knowledge about technical and fundamental analysis as a professional currency trader.

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A low spread forex broker is meant to help all traders – Know more

The forex trading market defines the spread as the price gap depicted by various buying and selling propositions that involve all currency pairs. The forex traders need to develop the spread prior to checking their trading profit. The lower spreads play a key role when the trades are drawn by the positive column. Low fixed spreads of forex trading are considered to be beneficial for forex traders by all forex traders that are dominating the market. That’s one reason why these fixtures are more proudly advertised by these market leaders.

Low spreads are likely to bring down much of the financial losses. The basic principles that any trader follows sees a contrast here. Earning profits and securing personal funds are the primary aims of all his moves. The internet will help you find a low spread forex broker that shows specific values for floating as well as fixed spreads. You may choose either the minimum level or the medium level for setting the values. There’s always this possibility of making big deposits, but you’ll find brokers that indulge in bits-n-pieces trading by allowing you to use mini as well as micro accounts. The fixed spreads don’t yield any real advantage; these spreads are bound to undergo tactics like widening, which are followed by a number of forex brokers.

A low spread forex broker usually seems more attractive to the scalping supporters

They would mostly find this strategy to be more attractive as it opens a variety of deals as a matter of fact. It’s under these conditions that commissions are given; commissions wear a cap of 100 pips. Cost of Forex operations are lowered by the low spread desks; dealing with these desks is also much simpler for traders. A few good traders will consider this to be a key selection component.

The ECN trading model doesn’t show traders with any fixed spread. When it comes to buying and selling, a specific rate is shown by each currency pair. The spread thus offered will show an accurate reflection of this rate. All of the trading investors will be able to explore the actual trading conditions within the forex market.Forex Trading System

Some traders choose a fixed spread when they consider a heavier supply and demand. This doesn’t let you defy the fact that all fixed spreads are only usable when the market doesn’t show any favorable trading conditions. The actual buying and selling rates for a specific currency pair don’t have anything to do with it. Clients availing the ECN are able to access the retail as well institutional forex trading participants directly. A quality forex trading platform neither indulges in any form of competition against clients nor does it trade against them.

Tight or low spreads are yielded by certain brokers while dealing with small accounts. Initial deposits are paid to these brokers by small traders who find them very attractive. For every trader, it’s good to opt for lower spreads and trading commissions. You may enjoy such an environment under a suitable broker.

Clients may avail competitive rates and effective spreads via any quality trading platform. They would usually pick a reputable and loyal liquidity provider to establish a powerful bond by making quality investment. Like the majors who explore these platforms, the forex zone is also experienced by the participating clients.

The Best Methods of Investment for 2014

As the global financial markets prepared for another period of turbulence, it seems clear that the long-term sustainability of the economic recovery cannot be guaranteed. This is creating a set of far from ideal circumstances for investors and traders, who must surmount rising odds if they are to operate profitably and get the best possible value from their hard-earned capital.

images1With this in mind, it stands to reason that the average investor should be constantly looking to adapt and evolve their portfolio. Without this type of proactive philosophy, it is almost impossible to maximise profit and obtain the best possible returns on your individual investments. In an age where the global economy seems to fluctuate between boom and bust with alarming regularity, the ability to be flexible with regards to your investments will stand you in good stead.

3 Investment Options for 2014

With this in mind, let’s take a look at three of the most appealing investment options for 2014 and the reasons behind their rising popularity. Consider the following: –

Prepare for a Weaker Dollar in the Long-term

As anyone who has ever traded currencies can testify, investing in the forex market can hardly be described as a reliable vehicle for your capital. That said, it does deliver significant returns to knowledgeable traders, while advancements in technology have also made it far easier to identify and capitalise on real-time trends. Take the current market, for example, which is being characterised by significant fluctuation in major currencies such as the US Dollar (USD) and the Euro (EUR). Despite its recent gains, however, the US Dollar is likely to weaken as the year unfolds, meaning that alternative currencies will provide more reliable returns for investors.

Invest in your Retirement Fund as Early as Possible in 2014

With the failure to save placing a significant strain on public funding, governments’ in the Western world are moving towards the initiation of compulsory contributions for citizens. This should be necessary, however, as every working individual should look to invest in their pension plan as soon as possible in 2014. By starting now you can capitalise on tax-advantaged growth, before the deadline for this financial year passes on April 15th. This not only guarantees a viable return, but it also provides significant peace of mind for hard-working households.

Embrace the Trend for Global Investments in the Year Ahead

Increasingly, there has been a significant shift and distribution of economic influence from developed nations to those that are continuing to develop. This trend was reaffirmed recently, as the recovery of the Chinese economy encouraged experts to suggest that it will supersede the U.S. as the world’s most dominant financial power by the year 2030. This means that investors should actively look to invest in emerging markets, with low-valuation stocks and equities offering an excellent opportunity to maximise your returns. Such diversification will serve you well, and strengthen your portfolio to suit an evolving socio-economic climate.

How To Get Started In Forex Trading?

How to Get Started in Forex Trading?

Forex Trading SystemThe key to trading in foreign currencies is staying calm. Foreign exchange or forex traders speculate on movements in exchange rates, much like others would speculate on movements of stock prices. Even small exchange rate fluctuations can make a big difference to a forex trader. Market volatility is the place where traders make their money.

How to Trade FX

As a result of the unpredictability of currency markets, clever forex traders – who also call themselves investors – need to develop a plan. They have to set targets as to when they want to sell and buy their currency and, even more fundamentally, they need to adhere to it.

Forex trading has been gaining in popularity over the years, with forex brokers reporting a growth in clientele, especially over the past few years, as the Euro zone, the US and Chinese markets have slowed and governments have tried to spur growth by injecting cash into the economy.

Forex traders, who deal on their own personal accounts, follow the news closely. Their common warning is against playing with large sums of money. The uncertainty in the largest markets in the world enables forex traders the elbow room for playing around with global currencies.

There are indicators to keep a lookout for, such as the US Federal Reserve’s decisions, and trader reports from the European Central Bank. It is mainly at times of economic policy announcements that high volatility fluctuations – leading to high returns – happen.

Disasters, notably the Japanese earthquake and tsunami in 2011, also generate moneymaking opportunities by sparking market volatility.

What Platform to Trade on

To learn about forex there are companies providing access to the best trading software. One example is the Vantage FX MetaTrader 4 program which is also available on apple – and MT4 for Mac is becoming more and more popular by the day.

A web-based platform for forex, this provides the education, the low spreads, and other tools that traders need to come confidently into the market.

This sort of online forex trading platform offers customer care and attention as well as a choice of packages to suit the individual – seasoned trader or beginner.

At Vantage, for example, clients are provided with an account manager, meaning there’s just one point of contact for each trader, backed with support on hand 24/7.

Many people start out dabbling in forex trading in their spare time but the sort of success that can come with experience and an understanding of how the market works can lead many of these retail traders to give up their day jobs and concentrate on forex. Successful trading can give people the sort of cash flow, flexibility and even security that is difficult to find in the conventional world of work.

Plus, with the kind of software available today, forex traders no longer have to sit glued to their computers. If you would like learn digital trading read the binary options reviews. It’s possible for them to set stop limits, say at £1, $1.45 or €1, or a profit limit — say at £1.20, $1.65 or €1. But the most vigilant forex traders need to keep a very close watch on news, politics and even the weather.

Article by Robert Berkeley
Robert has successfully built Vantage FX UK Trading Limited, into one of the key players in the FX market across Europe with significant growth year on year.
Robert regularly blogs about forex trading and comments on major fx new events.

Things You Should Know About Forex Trading

Forex account Both veteran and novice traders of the stock market find that trading in foreign currency exchange, commonly referred to as Forex, is really attractive. The basic difference between stock market and Forex market is that one can trade in the latter market at any time of the day as it remains open 24×7. And this is what allures new traders; they can maintain their regular job while practicing trading.

If you’re interested in Forex trading, you should know basic things related to it before you kick in and here they are.

  • Capital – This is perhaps the most important and imperative requirement for trading in the Forex market. Unless you have adequate amount of capital to invest and make the trades, you can’t expect significant profit. You should have enough money to trade currencies, i.e., to buy and sell currencies. The amount, however, depends on your personal ability and your chosen type of Forex account. In the U.S., the traders are allowed to make purchase of up to 50 times of the amount of money they have cash in their trading account. And this is what referred to as leverage in the trading industry. For example, if you want to make a purchase of 100,000 dollar worth of your currency, you just need to keep 2,000 dollar in your account. Some brokerage firms offer the facility of ‘micro’ accounts in which you can keep as little as only 50 dollar and buy 2,500 dollar of currency.
  • Trading platform – You can’t place a trade or a bid without electronic access to your broker. So you must have a PC or laptop with Internet connection. The entire industry is operated electronically and almost all brokerage firms are specialized in creating their own software to execute trading orders placed by the customers. You may try different programs offered by different brokerage company for free of cost by simply opening an online demo account. They would help you know the major features of their trading software and help you find an interface which suits you the best.
  • Trading price charts – Like other traders, you can also rely on the price charts while making any trading decision. The Forex industry is highly chart-driven as the fundamental and economic data are not so easy to access and to understand especially when it comes to trading currencies. However, it doesn’t happen with stock trading. Companies issue quarterly income reports on the health of the business and this has major impact on stock prices. A similar means of updated information on any particular currency is not available and thus the Forex traders depend on the charts to find clues on potential value of the currency. Therefore, accessing the charts is the fundamental requirement of Forex trading.
  • Considerations – Many individuals who have opened a Forex account recently have a notion that if they have the right instruments and money in pocket, then they can easily trade in Forex market and make significant profit. However, in reality, the market is extremely volatile and because of high leverage facility, it is considered as one of the riskiest trading platform. So, being a new trader, you must spend some time on practicing the strategies with very little to no money involved. Major brokerage firms of the country provide the new customers with the facility of simulation accounts so that they can trade with virtual money. You should take advantage of it to practice and enhance your trading skill beforehand, and start trading just like an efficient Forex trader.

Discussed above are some of the very important factors that you must take care of while trading in the Forex.

What Does the IMF do for Financial Markets

What Does the IMF do for Financial Markets

With the financial markets as volatile as they are today, we tend to highlight things we may not have noticed before and question the governing institutions that have direct and clear influence over the economy. One such financial markets institution is the IMF otherwise known as the International Monetary Fund and sometimes known simply as “The Fund. Although there have been a few red flags of late leading to increased scrutiny of the IMF, most still don’t know what the institution does, how it works or where it came from. Let’s look at some of aspects of the IMF as we try to understand how they influence financial services and markets today.

The Founding of the IMF

In July 1944, the United Nations conceived an idea to create an institution that would stabilise the world’s monetary system, much in the same way the United Nations sought to stabilise amicable relations between countries. The priority was to ensure the breaking of the vicious cycle of competitive devaluations that was a major player in the events leading up to the Great Depression. Although we still have recessions and major setbacks in financial markets today, the IMF strive to hold back the worst of it.

The IMF Today

Even to this day the IMF seeks to fulfil their initial purpose of keeping the monetary systems of the world in check. However with financial stock markets and the forex adding more complex systems to the infrastructure of the world’s economy, it remains a constant battle. However the IMF acts as an ideal; their existence promotes sustainable economic relations and growth, strives to increase living standards in a proportional and balanced way and reduce overall poverty worldwide. It’s truly a noble endeavour; capital and financial markets can afford to grow while the IMF remains vigilant on standby as the world’s economic fire fighters.

The IMF as Guardians

One of the ways the IMF helps is through offering loans to struggling countries in times of need; they can balance out those countries ailing economies which can bounce back into the global financial markets due to the stability those loans offer. One major recent example was the struggles that Greece has been going through in regards to the Euro Zone crisis; the IMF stepped in and offered a helping hand. The IMF is able to function in this regard in a few ways that other similar financial markets and institutions operate. If the current trends are to be believed then financial markets are going to need all the help they can get; it’s a good thing then that the IMF waits in the wings to lend a helping hand.

Eugene Calvini is a writer and forex enthusiast; armed at first with a FX demo account he has gone on to be a fully fledged Metatrader 4 forex broker and enjoys sharing his insight on forex topics.

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