Forex - Aussie Advances Against Greenback [AUD/USD]

8/23/2007 2:15:39 AM Against the U.S. currency, the Australian dollar advanced in the early Asian deals on Thursday. The Aussie fetched a high of 0.8164 at 10:50 pm ET Wednesday. The pair then slipped slightly, but it has been reversing of late. As of 2:15 am Eastern Time, the pair was quoted at 0.8159.


Forex - Euro Strengthens Against Majors Amid German Data []

8/23/2007 2:10:47 AM Amid the release of the German Q2 GDP data, the Euro showed strength against its major counterparts. At about 2:09 am ET, the Euro fetched 1.3552 against the dollar, 0.6788 against the Pound, 157.02 against the Yen and 1.6347 against the Swiss Franc.


Forex - Euro Mixed Against Majors Ahead Of German Data []

8/23/2007 1:58:45 AM Ahead of the releases of the German GDP, imports and the exports data for the second quarter, the Euro saw a mixed dealing. The Euro was higher against the British Pound, but it slipped versus the dollar and the Swiss Franc. Against the Yen, the Euro moved sideways.

At about 1:55 am ET, the Euro fetched 1.3547 against the dollar, 0.6788 against the Pound, 156.81 against the Yen and 1.6343 against the Swiss Franc.

Forex - New Zealand Dollar Strengthens Against Yen [NZD/JPY]

8/23/2007 1:28:11 AM The New Zealand dollar showed strength versus the Japanese Yen during late Wednesday in New York. The pair carried over its uptrend in the early Asian deals on Thursday. At about 8:50 pm ET, the Kiwi slid briefly but it regained its ground soon after and fetched a high of 82.79. Currently, the pair has been trading slightly lower and fetched 81.98 as of 1:27 am Eastern Time.


Forex - New Zealand Dollar Drifts Higher Versus Euro [EUR/NZD]

8/23/2007 1:25:15 AM In the late hours on Wednesday in New York, the New Zealand dollar moved in a tight range against the Euro. But the Kiwi drifted up during the early Asian session on Thursday and collected as much as 1.8988 at 11:00 pm ET. The pair then moved sideways, but it has been losing the gains of late. As of 1:24 am Eastern Time, the pair was worth 1.9091.


Forex - New Zealand Dollar Ticks Up Against Greenback [NZD/USD]

8/23/2007 1:22:16 AM After holding steady during late Wednesday New York trading, the New Zealand dollar ticked higher versus the U.S. currency in the early Asian deals on Thursday. The Kiwi hit as high as 0.7138 at 10:45 pm ET and then traded sideways. Lately, the pair has been weakening slightly and collected 0.7100 as of 1:21 am Eastern Time.

FOREX Software: A Critical Element for Success

In most cases when you sign up with a FOREX broker they will provide you with software to execute transactions as well as get market information. Since online trading has been around for quite some time now, the brokers have a pretty solid understanding of what the traders need from trading software. There are two primary classifications of software provided by the brokers; web based and client based.

One of the mandatory services needed by all FOREX software is real time market updates. Since the FOREX market is so fast paced and volatile traders must have data that is accurate to a few seconds to make decisions on when to enter and exit their positions. All brokers make claims that their software will remain updated with a minimum of delay but the reality is that there are a variety of factors that can delay the software displaying updated information.

The users internet connection speed as well as their geographical distance from the broker are probably the two primary issues that can affect the update time. If you wish to be successful trading FOREX it is highly recommended that you have a high speed internet connection and a fairly up to date computer. You might also consider selecting a broker relatively close to you; if you are trading from the US you might want to avoid a broker based out of Australia. During times of extreme market volatility this distance could cause a delay significant enough to cause issues with your trades.

Online Forex Trading

Do you know what Forex trading is? Some people have heard of this type of trading, others have not. If you haven’t, it might be something you are interested in trying. Forex trading stands for foreign exchange trading. What it consists of is the buying and selling of different currencies. This is done simultaneously, and there are people who make a lot of money with this kind of trading. This is apparent by the 1.9 million dollar turnover in this market that happens every day. Also a lot of it is done online. Online Forex trading is very popular.

Do you know what Forex trading is? Some people have heard of this type of trading, others have not. If you haven’t, it might be something you are interested in trying. Forex trading stands for foreign exchange trading. What it consists of is the buying and selling of different currencies. This is done simultaneously, and there are people who make a lot of money with this kind of trading. This is apparent by the 1.9 million dollar turnover in this market that happens every day. Also a lot of it is done online. Online Forex trading is very popular.

The most common currencies to trade are the Euro and the U.S. dollar, and the U.S. dollar and the Japanese Yen. However, nearly all of the Forex trading done involves the major currencies of the world. These include the Euro, Japanese Yen, U.S. dollar, Canadian dollar, British Pound, Australian dollar, and the Swiss franc. The Forex exchange is different from other exchanges, such as the New York Stock Exchange, in that it does not have a physical location or central exchange. The exchange day begins in Sydney, then moves to Tokyo, on to London, and finally ends in New York. Each country takes the responsibility of regulating the Forex exchange activities in their own country. So there is no overall regulatory agency. However, this does not seem to be a problem and most countries do very well at overseeing Forex exchange activities.

Forex rate. For instance, economic things, like interest rates and inflation, and also political things, such as political unrest in other countries and major changes in government cause up and down changes in the Forex rate. However, these things tend to be short-term, and don’t affect it for long.

Online Forex trading sites are easy to find by surfing the Internet. Most of them provide a wealth of information for the first time trader. You can find out about the history of Forex trading, how to co it, tips on being successful, etc. You can also start trading with as little as $250 in your account on some sites. For anyone who is interested in currency or trading, it is something you should check out.

As with any type of trading, there are no guarantees that you will make money or that you won’t make money. It is a smart choice to learn as much as you can about online Forex trading before investing any money and doing any trading. It is a fact that informed investors do better than those who don’t know much about what they are trading. So get the fact before you dive in. You might just make a little money in a very interesting currency exchange.

Getting Started Trading Forex

Terminology and Market Conventions

If you are going to trade forex you need to understand the terms and quoting conventions used, especially in regards to the spot market.

Notational Conventions
The forex market uses 3-letter codes for all currencies. These are commonly known as SWIFT or ISO codes. For example, USD is the code for the US Dollar. Here are the codes for the other primary currencies:

AUD: Australian Dollar
CAD: Canadian Dollar
CHF: Swiss Franc
EUR: European Euro
GBP: British Pound
JPY: Japanese Yen
( For a complete listing of all currency SWIFT codes, click here. )

Expressing a relational value between two currencies is done by combining two currency abbreviations in the fashion of XXX/YYY. This indicates the amount of YYY currency (the “quote” currency) equivalent to one unit of XXX (”base” currency). For example if the exchange rate for USD/JPY - the US Dollar to Japanese Yen rate - was 100 it would mean that each USD is worth 100 JPY.

Using this convention, changes up or down in the quoted exchange rate indicate changes up or down in the value of the base currency. Using the USD/JPY example again, if the rate went from 100 to 101 it would mean a 1% increase in the value of the USD against the JPY. Similarly, a decline from 100 to 99 would represent a 1% fall in the USD value vs. the JPY.

In theory, one could quote the exchange rates either way around - meaning if USD/JPY is 100 it is the same as saying JPY/USD is 0.01 (one JPY is worth $0.01). In practice, however, the forex market has specific conventions for the traded pairs. In most cases, USD is the base currency, with the other currency in question being the quote currency. USD/JPY is an example.

There are a few exceptions, though. When it was introduced in 1999, the market authorities decided the Euro would always be the base currency in all traded pairs. Before that, the Pound (GBP) held that distinction. Thus, when traded against either of those, the USD is the quote currency (EUR/USD, GBP/USD). The same also holds for former British Commonwealth currencies the Australian Dollar (AUD/USD) and the New Zealand Dollar (NZD/USD).

It is worth noting that forex futures contracts involving currencies as quoted against the US Dollar do not hold to the spot market convention. Instead they all use the USD as the quote currency.

Majors and Crosses
In the forex you will here the terms “majors” and “crosses” when traders refer to different categories of currency pairs. In general terms, the “majors” are the pairs which include the USD quoted against the other primary industrialized currencies. Those include the ones listed above. So the majors are as follows:

AUD/USD
EUR/USD
GBP/USD
USD/CAD
USD/CHF
USD/JPY

While technically every currency pairing is a cross-rate, the term “cross” is most commonly used to refer to currency pairings which do not include the USD. For example, EUR/JPY is the Euro-Yen exchange rate. That would be considered a cross.

Forex Price Quotes
With an understanding of what we are looking at, now we can turn out focus to the actual price quotes. The graphic shows a sample table of quotes for an array of currency pairs - majors and crosses.

One thing you will notice in the table is that some pairs are quoted to four decimal places, while others only go out two places. In general terms, those pairs with values of about 10 or less will go out to four places, while those with higher values will be quoted only at two places.

Regardless of how many decimal places a currency pair is quote to, though, the term “pip” is used to define a single price movement value. So, for a two decimal place pair, a pip would be .01, while for a four decimal place pair a pip would be .0001.

We can see this in the quotes on the chart, especially when looking at the bid/offer spreads. AUD/JPY is quoted at 79.60-79.64, which is a 4 pip spread, while AUD/USD is quoted 0.7648-0.7650 for a 2 pip spread.

In recent times there has been introduced the “pipette”, which is a fraction of a pip. In essence, some of the more popular pairs like EUR/USD are trading at five decimal places now, which is why you can see a spread of 1.5 listed on the chart (column to the right of the price quote itself). That means the bid-offer spread is 1 and 5/10 pips.

One will sometimes here the term “figure” in spot forex trading. That is used to refer to a price level which is a round 100 pip figure. In USD/JPY that would be a multiple of 1 full JPY (such as 104), while in GBP/USD the figure would be a $0.01 multiple (like 1.8800).

The term “yard” sometimes comes up as well. That is used to refer to a one billion base currency transaction. So a yard of USD/JPY would be $1 billion.

Getting in to the Trading

Opening an Account
It is quite easy to start trading forex. There are a great many forex brokers available and opening an account is pretty straightforward. Some things you should consider as you look to identify the one best suited to you are:

• Account minimum deposit (if any)
• Transaction size flexibility
• Spreads
• Execution
• Commissions (if any)
• Security of deposited funds
• Allowable leverage
• Currency pairs available for trading
• Usability of the trading platform

The great thing is that nowadays the vast majority of brokers have available demo trading platforms you can use to evaluate their system. Be sure, though, to make note of any differences there are between the real platform and the demo one. Some brokers’ platforms are both the same across the board, but some have noticeable differences in things like execution speeds. It wouldn’t hurt to check around the discussion boards to see what others are saying.

Actually, if you are new to forex trading it is well worth it to spend a while trading via a demo platform first. It will help you develop and understanding of how it all works. That way, when you do go live, you will be more confident and ready for action.

Making Trades
Forex market trading is really little different from an execution perspective than most other markets. You can buy or sell. In most cases, the same types of orders (stops, limits, etc.) are available. The trading platforms are very modern and trades can be done very quickly. Anyone who has ever used an online trading platform for any other market will have no trouble making the move to forex and executing trades with ease. For that matter, even those new to trading will find entering and exiting forex positions a breeze.