Futures Market

Currency futures are specific types of forward outright deals which occupy in general a small part of the Forex market (See Figure 3.1). Becausethey are derived from the spot price, they are derivative instruments. They are specific with regard to the expiration date and the size of the trade amount. Whereas, generally, forward outright deals—those that mature past the spot delivery date—will mature on any valid date in the two countries whose currencies are being traded, standardized amounts of foreign currency futures mature only on the third Wednesday of March, June, September, and December. There is a row of characteristics of currency futures,...

Forward Market

The forward currency market consists of two instruments: forward outright deals and swaps. A swap deal is unusual among the rest of the foreign exchange instruments in the fact that it consists of two deals, or legs. All the other transactions consist of single deals. In its original form, a swap deal is a combination of a spot deal and a forward outright deal. Generally, this market includes only cash transactions. Therefore, currency futures contracts, although a special breed of forward outright transactions, are analyzed separately. According to figures published by the Bank for International Settlements, the percentage share of the forward...

Spot Market

Currency spot trading is the most popular foreign currency instrument around the world, making up 37 percent of the total activity. The fast-paced spot market is not for the fainthearted, as it features high volatility and quick profits (and losses). A spot deal consists of a bilateral contract whereby a party delivers a specified amount of a given currency against receipt of a specified amount of another currency from a counterparty, based on an agreed exchange rate, within two business days of the deal date. The exception is the Canadian dollar, in which the spot delivery is executed next business day. The name "spot" does not mean that the...

The Federal Reserve System of the USA and Central Banks of the Other G-7 Countries

The Federal Reserve System of the USA Like the other central banks, the Federal Reserve of the USA affects the foreign exchange markets in three general areas: • the discount rate; • the money market instruments; • foreign exchange operations.For the foreign exchange operations most significant are repurchase agreements to sell the same security back at the same price at a predetermined date in the future (usually within 15 days), and at a specific rate of interest. This arrangement amounts to a temporary injection of reserves into the banking system. The impact on the foreign exchange market is that the dollar should weaken. The repurchase agreements...

Kinds of Exchange Systems

Trading with Brokers Foreign exchange brokers, unlike equity brokers, do not take positions for themselves; they only service banks. Their roles are:• bringing together buyers and sellers in the market; • optimizing the price they show to their customers; • quickly, accurately, and faithfully executing the traders' orders.The majority of the foreign exchange brokers execute business via phone. The phone lines between brokers and banks are dedicated, or direct, and are usually in-stalled free of charge by the broker. A foreign exchange brokerage firm has direct lines to banks around the world. Most foreign exchange is executed through an open...

What is major currencies?

definition and meaningThe U.S. Dollar The United States dollar is the world's main currency. All currencies are generally quoted in U.S. dollar terms. Under conditions of international economic and political unrest, the U.S. dollar is the main safe-haven currency which was  proven particularly well during the Southeast Asian crisis of 1997-1998. The U.S. dollar became the leading currency toward the end of the Second World War and was at the center of the Bretton Woods Accord, as the  other currencies were virtually pegged against it. The introduction of the euro in 1999 reduced the dollar's importance only marginally. The major currencies...

how Factors Caused Foreign Exchange Volume Growth?

Foreign exchange trading is generally conducted in a decentralized manner, with the exceptions of currency futures and options. Foreign exchange has experienced spectacular growth in volume ever since currencies were allowed to float freely against each other. While the daily turnover in 1977 was U.S. $5 billion, it increased to U.S. $600 billion in 1987, reached the U.S. $1 trillion mark in September 1992, and stabilized at around $1,5 trillion by the year 2000. Main factors influence on this spectacular growth in volume are indicated below. For foreign exchange, currency volatility is a prime factor in the growth of volume. In fact, volatility...

Main Stages of Recent Foreign Exchange Development

The main phases of the further development of the Forex in modern times were: • signing of the Bretton Woods Accord; • constitution of the international monetary fund (IMF); • emergency of the free-floating foreign exchange markets; • creation of currency reserves; • constitution of the European Monetary Union and the European Monetary Cooperation Fund; • introduction of the Euro as a currency.The Bretton Woods Accord was signed in July 1944 by the United States, Great Britain, and France which agreed to make the currency market stable, particularly due to governmental controls on currency values. In order to implement it, two major goals were:...

Foreign Exchange in a Historical Perspective let me explain

Currency trading has a long history and can be traced back to the ancient Middle East and Middle Ages when foreign exchange started to take shape after the international merchant bankers devised bills of exchange, which were transferable third-party payments that allowed flexibility and growth in foreign exchange dealings. The modern foreign exchange market characterized by the consequent periods of increased volatility and relative stability formed itself in the twentieth century. By the mid-1930s London became to be the leading center for foreign exchange and the British pound served as the currency to trade and to keep as a reserve currency....

Foreign Exchange as a Financial Market let me show you

Currency exchange is very attractive for both the corporate and individual traders who make money on the Forex - a special financial market assigned for the foreign exchange. The following features make this market different in compare to all other sectors of the world financial system: • heightened sensibility to a large and continuously changing number of factors; • accessibility to all traders in the major currencies; • guaranteed quantity and liquidity of the major currencies; • increased consideration for several currencies, round-the clock business hours which enable traders to deal after normal hours or during national holidays in their...

CONCLUSION For Candlesticks

By using real-body support and resistance levels, we can try to improve our trading and analysis on several levels. In the short term, we can derive important counteraction trading points and improved longer-term entry levels. In the longer term, we can use real-body support and resistance to get a jump on market breakouts in a trend-trading strategy. Let me reiterate: Candlestick charting should not be used in a vacuum. That applies to the real-body support and resistance levels as well. You should, however, take the time to try out this methodology. I'm sure you'll find it worthwhile, and a beneficial addition to your technical toolbox. It...

A REAL- life EXAMPLE for Candlesticks lol

Figure 3, which shows the sterling/Deutschemark cross-rate, contains several excellent examples. You can see how many times prices either approached or penetrated real-body support and resistance points but were unable to sustain those levels. Time after time, an attentive trader could have entered positions counter to the prevailing market action and would have done well. There are two noticeable exceptions, however. FIGURE 3: STERLING/DEUTSCHEMARK...

How to MINIMIZING THE RISKS in forex?

There is no way around the risks inherent in trading counter to the prevailing market action. All we can do is reduce the risks as much as possible by using the tools available. Happily, there are ways to do this. First, always be aware of the longer-term picture. If the market you are planning to trade is in the middle of a strong trend, going against that action is probably one of the quickest ways to lose money. Wait until the momentum starts to ease; this will reduce your chances of getting caught on the wrong side of a breakout. Further, this is a good time to mention a candlestick caveat: Beware of reversal patterns signaled by candlesticks...

TRADING APPLICATIONS

One of the first uses that many technicians see for this technique is in terms of breakouts, much like in using bars. The advantage in using real-body highs and lows for support and resistance is that ranges are tighter, allowing entry into a trading position earlier than might otherwise have been the case. Perhaps the most intriguing part of this new methodology, however, is its usefulness for day trading. Most technicians use candlesticks as a day-end indicator, but this technique gives us a greater degree of depth than is necessary for day trading. Real-body support and resistance allow us to take our analysis into the shorter time frames,...

DETERMINING SUPPORT AND RESISTANCE

When a chartist looks at a bar graph, accumulations of highs and lows are often seen as key market levels. Breaking. through these points signals important changes in the expected direction of prices. Candlestick real bodies, however, may turn out to be better for this task. Much like highs and lows are on bar charts, an accumulation of real-body highs or lows at a given level is significant. An example of real-body resistance levels can be seen...

Observation is the best friend of the technical analyst.

Observation is the best friend of the technical analyst. By watching the markets, I noticed something interesting about candlestick charts, which I use extensively. I realized the real bodies used in candlestick charting can be used to determine significant support and resistance points, a strategy I had never seen before. Take a look at how it can be done. Although they have only recently become popular in the Western Hemisphere, Japanese traders...

9 Building Blocks to Double Your Sales Archive

9 Building Blocks to Double Your Sales Chapter 1-The Building BlocksChapter 2- The “Secret” to Small Business SuccessChapter 3- Supercharge Your Website Chapter 4-Fill the Funnel Chapter 5- Convert Your FunnelChapter 6- Win Lifelong Customers Chapter 7- Flip Your Funnel Chapter 8- Sell Stuff OnlineChapter 9- Collect the Cash Chapter 10- Grow Through Partners Chapter 11- Measure and TweakConclusion  © 2008 By Clate ...

Conclusion: 9 Building Blocks to Double Your Sales

Time to Get Started Many of the most fascinating people I have ever met are small business owners. They are thoseindividuals that decided they want to do something more with their lives. They want to share their talents, skills, and interests with the world. I admire them. Many of these entrepreneurs are my closest friends. I listen to their stories, I see their strength, and I can’t help but feel more ambitious myself because of what I see resonating from them. Business ownership is not simple, but I and my entire company are on a mission to make it more so. That is why we’ve done thousands of hours of study. We’ve read the books by all the...

to get the best results in your in business Test and Test Again

If you want to get the best results in the shortest time possible, test and test again. Those who have been in business for a while have a fairly good understanding of their customers. However, if you’re just starting out, you don’t have the luxury of getting to know anybody. You need to sell, and you need to sell now. So you need to know what messages are going to work. In actuality, whether you have been in business for a while or not, this is...

Move Forward with Confidence let me show you

When small business owners are in control, when they have the power of measurement, their campaigns become more specific, targeted, and by extension more effective. You cannot guess 100% of the time what words, phrases, offers, or bonuses a consumer is going to respond to. However, at least with certain information under your belt, you have the ability to act with confidence. When you track and measure your marketing messages, your ability to communicate better with your customer or prospect improves. Your messages are more specific and targeted, and you can begin budgeting for them right type of marketing, rather than throwing your money out...

Get a System that permits instant feedback

With simple, easy to use systems, measuring results is a piece of cake. (Once again, you have to love technology.) When you measure your marketing efforts, you’re going to start benefiting from your marketing faster and with greater results than you ever imagined. When you are measuring your data, you are going to have the edge on marketing techniques. Think for a minute about what instantaneous access to customer responses are going to do for your marketing campaigns. If you were to set up an entire campaign around a particular theme, and the first two steps of the campaign produced no interest in your products or services, would you continue...

Double Your Sales with a Doubled Marketing Effort

Marketing is a fast, efficient way of pushing the message from your head and implanting it in the hearts of your consumers. If you choose to be the door-to-door salesman fine. But I do want you to understand the ease and speed with which the “right” marketing message can reach your potential customers. When you take the time to measure your marketing efforts and then make the appropriate changes, you are going to see the results in the increased...

what do I mean by “Measure and Tweak?

Measure and Tweak We’ve come to the last building block. As I mentioned earlier, none of the building blocks are in order. You may be thinking, Why is “Measure and Tweak” all the way at the end? It wasn’t some organizational mismanagement. The blocks are just all reliant upon one another for helping small business owners double their sales and achieve success. But this block, like all the others is critical to success. It holds as much importance...