Forex Market

The following facts and figures relate to the foreign exchange market. Much of the information is drawn from the 2007 Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity conducted by the Bank for International Settlements (BIS) in April 2007. 54 central banks and monetary authorities participated in the survey, collecting information from approximately 1280 market participants.

Excerpt from the BIS:

"The 2007 survey shows an unprecedented rise in activity in traditional foreign exchange markets compared to 2004. Average daily turnover rose to $3.2 trillion in April 2007, an increase of 71% at current exchange rates and 65% at constant exchange rates...Against the background of low levels of financial market volatility and risk aversion, market participants point to a significant expansion in the activity of investor groups including hedge funds, which was partly facilitated by substantial growth in the use of prime brokerage, and retail investors...A marked increase in the levels of technical trading – most notably algorithmic trading – is also likely to have boosted turnover in the spot market...Transactions between reporting dealers and non-reporting financial institutions, such as hedge funds, mutual funds, pension funds and insurance companies, more than doubled between April 2004 and April 2007 and contributed more than half of the increase in aggregate turnover." - BIS

Structure

* Decentralised 'interbank' market
* Main participants: Central Banks, commercial and investment banks, hedge funds, corporations & private speculators
* The free-floating currency system arose from the collapse of the Bretton Woods agreement in 1971
* Online trading began in the mid to late 1990's


Source: BIS Triennial Survey 2007

Trading Hours

* 24 hour market
* Sunday 5pm EST through Friday 4pm EST.
* Trading begins in the Asia-Pacific region followed by the Middle East, Europe, and America.

Forex Broker World Wide

Australia , Bangladesh , Brazil , Bulgaria , Canada , China , Denmark , Egypt ,Estonia , Hong Kong , Hungary , India , Iran , Japan , Malaysia , New Zealand , Oman , Pakistan , Philippines , Poland , Qatar , Russian , Federation , Saudi Arabia , Singapore , Sweden , Switzerland , United Arab Emirates , United Kingdom , United States of America.

BOE Stays the Course!

British policy makers voted unanimously to keep their quantitative easing plans in place, signaling that the UK economy may not be rebounding as fast as they would like. This could lead to a longer period of low interest rates as the UK attempts to fight off deflation. As a result, the British pound (GBP) is near a two-month low against the US dollar (USD), trading just under 1.60 at 1.594.

In the meantime, it appears as though traders may have left early for the holidays as volume seems light. The US dollar is taking a brief pause today, down against every currency but GBP. This comes on the heels of the 5.1% rally the dollar has been on since year end. So this is a welcome pause.

Also, the US dollar has been on a tear against the Japanese yen (JPY) as the rising yields in the US are discouraging US dollar carry trades in favor of yen carries.

Let’s take a look at the daily chart of (USD/JPY): (click chart to enlarge)

As you can see, this pair has bounced off its low near 85 and has been on a steady climb higher. I identified this move at the beginning of the month in this article from Dec. 2nd. What I wanted to show in today’s chart was how you can use Fibonacci retracement levels to see where to get in and out of trades.

Today’s pause occurs right at the 38.2% retracement level. If you were looking to scale out of the position or sell some this could be a good place to do so. At these levels there will typically be pockets of resistance. If the trend continues higher, then we expect to reach the next level at 50% at a price of 93.68. Should the pair pull back, then we would expect to see some support at 89.8, the 23.6% level.

So as you can see, knowing where these Fib levels are can really impact your trading, helping to show you where “hidden” support and resistance may be. This is important because it can help you know where to place your stop and limit orders which will help you manage your trades.

I expect that we’ll see continued dollar strength through year-end and into the new year, so I’m going to be buying on pull backs of this pair.

To learn more about how Fibonacci levels and other tools of technical analysis can help your trading, be sure to check out our currency trading courses!

British Pound Rebound!

This mornings biggest gainer so far is the British pound (GBP), trading up 1.15% vs. the Japanese yen (JPY) and .80% vs. the US dollar (USD). There’s also some Japanese yen weakness, as its down across the board, most notably against the commodity currencies (Aussie, Kiwi, & Loonie).

So what does all of this mean for the year end? Not much. Because volumes are light, I am seeing the continuation of trend where there is a fundamental story– Japanese yen for example– and seeing some short covering and technical bounces in currencies where the fundamentals are less clear. The gains in the Euro and GBP are examples of this.

And lastly, some bounces in the commodity currencies (Aussie, Kiwi, and Loonie) are taking place after the recent dollar strength. It appears as though the market is in the mood for risk taking and is seeking out higher-yielding currencies. This comes on the heels of the “Santa Claus” rally in stocks so the market is anticipating gains for the beginning of the New Year.

As I mentioned yesterday, much of this appears to be “mean reversion” trades, as the currency pairs move away from extremes and back toward the middle of their recent ranges. This could mean we will see some sideways action for the start of 2010, as the macro themes begin to play out.

The major themes for the 2010 will be inflation, GDP growth, interest rates, possible debt defaults, and budget deficits. In other words, basic economics LOL!

I’ll discuss these themes in greater depth in 2010 but for now I’m going to keep my trading short-term and will not be carrying any positions into the New Year.

So make this year’s New Year’s Resolution to get educated about the forex market!!!! There are numerous opportunities to profit from this market just by watching the news and knowing what action to take!

Don’t waste another year trying to analyze stocks only to find out that the company has been cooking the books or providing false information or paying their executives GINORMOUS bonuses!

Get involved in the forex market!!! It’s as simple as reward the countries that are in good financial conditions, and “punishing” those that aren’t.

Why necessary of Global Business

The world is getting small due to revolutioney changes in technology as a result of such changes we're watching pulse information of another world staying at our small room. We have to consider the reasons that when we operate our own business at only one place we're able to deal only 100, 200, 500 only but when we deals globally we can deals more than 10,000 peoples at once using emails, or our website presenting their our products. so we have to adopt global business technique to get success in our professions.

Online Business Importance

Microtek is software Development Company in kathmandu, Nepal, that does not limit themselves to work only within Nepal, but prefer to spread their wings across the continents, Their ability to conduct business around the world is an indication of how the web is capable of reaching in all directions and over any distance. According to this reputable Software Developmet company, no matter where your company is based, your website can generate online business and income from anywhere on the planet.

Think of your website as the formal introduction to your company. It is the frontman that conveys an idea or an image of what your business has to offer to the world. The development and design of your website should be the single most important thing you carry out when attempting to get your online business off the ground. By using a unique and eye catching website design to draw people in, you are already receiving potential business from them getting to know who you are and what you are about. Many website design companies will also implement SEO and search engine marketing tactics as a part of their web development and design offerings.

Microtek, Software development company is well aware of the potential behind using meta tags and keyword implementation and how it will increase the chances of people actually stumbling across your website by improving your rankings on search engines. With continued traffic to your site your chances of being in the top 10 on Google and Yahoo search engine listings will increase even further, making your business stand out amongst the crowds of competitors.

It's all a matter of the correct planning. By making use of a proficient web design company, that understands the value of implementing a professional and informative website, you can guarantee that your needs and priorities will be expressed through your website. Be sure to plan the design and development of your website thoroughly before beginning the process of building it so as to impart all the necessary points of interest through it, as well as points of contact. With relevant content and eye catching design, your business can literally sell itself.

Once your website design is approved and you have a fully functional and informative website up and running, you will need to promote it on the web. By submitting your site to search engines, forums, and article directories you will have a greater chance to get your website noticed. Web design companies can help you with this and will often offer this as a part of their service. The moment your links and site are listed and indexed on search engine pages, your chances of becoming a reputable online business will have grown exponentially, proving that you literally cannot afford to be without an engaging and illuminating website when entering the world of online business.

Rajendra Dhakal and Bandana Parajuli founded in 2009, his company Microtek has grown from software development and web portals development company into an international online web applications design and development company that does business everywhere in the region and works with people from different parts of the world. since its inception, continues to be guided by the core values exhibited by its founder.

Reasons for Forex

1. Size: Let's start with the most obvious. The size of the Forex market is unprecedented and unmatched by any other global market. The astronomic number of anywhere between 2 and 5 trillion dollars is what is estimated to be traded daily in the Forex market. This characteristic of the Forex market is what probably causes the initial attraction to new traders. What keeps them interested are the following 6 features.
2. Accessibility: The Forex market, as opposed to any other market, is open around the clock. No need to wait for this institution or the other to open. You can trade currencies from the comfort of your own at any time during the day, something that makes Forex trading a simple and basic task for the retail trader. This is of course magnified by the internet and the constant access tothe worldwide web from anywhere on the globe.
3. Equality: This is a direct result of its size. As opposed to other markets, the Forex market is so huge, it cannot be effected by one individual person or institution. So, the retail trader, for all intents and purposes, is on the same "level" as the largest bank when it comes to Forex trading. The Forex market cannot be manipulated.
4. Leverage: Here is a tricky one. The Forex market has a very unique characteristic in terms of what it offers the simple trader. You do not need huge amounts of money to be able to trade huge amounts of currency. Almost all Forex brokers today offer a minimum of 100:1 leverage on your investment. The reason this is tricky is this can also be a huge down side of the Forex market. The opportunity to gain using leverage is equal to the risk of loss.
5. Volatility: The Forex market rarely stands still. Not only is it always moving, it is making large movements. Large volume transactions and high liquidity combined with fewer trading instruments generate greater intra-day volatility in the currency market that can be exploited by day-traders. Volatility for the most liquid stocks are between 60 to 100. Volatility for currency trading is approximately 500, another very attractive feature for anyone who wants to make quick and easy profits.
6. Profitability: Besides the obvious potential for profit in Forex trading, there is also another element that is exclusive to Forex. You can profit no matter which direction the market is going. As opposed to the stock market, in which you can only profit when your stock's worth goes up, in Forex there is a lot of money to be made even when your currency is going down. The Forex market is a two way market, you are always working with pairs, so if one currency is decreasing, that simply means another is increasing. There is always the possibility to profit in the world of Forex.
7. Transparency: This is always an advantage when considering an investment. Are you faced with the danger of being surprised by this event or another that will have an effect on the market and its movements? With the Forex market, what you see is what you get. Analyze the news, read the charts, there are no surprises. If you know what you are doing, you can predict the direction of the market, with relatively high percentage accuracy.