The foreign exchange market (Forex) is used to convert currency from one country into the currency of another. It allows individuals and companies from different countries to easily sell products.
Every country has its own currency.
The common Forex Currencies are:
U.S. Dollar($)
Euro(€)
Australian Dollar(A$)
Swiss Frank(CHF)
Japanese Yen(¥)
If a business exports something to another country they use the Foreign Exchange Market to convert payment.
The currency prices on the Forex market fluctuate due local, global, and economic factors. This gives the individual forex trader the opportunity to make a profit using arbitrage. Arbitrage is the buying of a currency at a low price and selling it at a higher price.
Ex.
($)= US Dollars (¥)=Yen
$1=¥130I use $10,000 to buy ¥1,300,000
The value of the ¥ rises therefore it takes less ¥ to buy dollars.
$1=¥100
I use my ¥1,300,000 to buy $13,000 and make a profit of $3,000.
Foreign exchange rates are determined in two ways.
Foreign exchange rates are determined by the supply and demand of the money supply.
A country’s money supply is regulated by the government and its central bank. When the government wants to increase the money supply, it tells the central bank to print more money or lower the interest rates.
Ex.
The U.S. Government increased the nation’s money supply when they bailed out the failing US Banks in October of 2008. This caused the supply of the $ to increase, therefore lowering the demand and decreasing the price.
http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=airpxcdYO32M
A country’s money supply has little to do with short term Forex rate fluctuations.
When investors act on expectations of the price of a currency it causes a bandwagon effect. This causes the price of the currency to fall or rise in the short term.
Ex.
A major hedge fund manage states the US Dollar is undervalued. The price of the US dollar rises regardless of the statements truth because the individuals act on this managers advice.
There are two styles of analysis.
Fundamental Forex analysis uses the size of the money supply, interest rates, and inflation rates. It may also use a countries balance of payments (imports vs exports).
Technical analysis relies on analyzing past trends using price and volume data to predict future trends.
© 2009-2010 ForexProtege.com All Rights Reserved -- Copyright notice by Blog Copyright
Besides the disciplined approach, I believe the most difficcult part of forex trading was understanding the processes and terminology of this dynamic money spinning environment.
The Amyloidosis Foundation estimates that approximately 3,000 people are diagnosed with amyloidosis each year in North America and that blood cancers overall have increased more than 40% in the last decade.
Hi, I’m very interested in Linux but Im a Super Newbie and I’m having trouble deciding on the right distribution for me (Havent you heard this a million times?) anyway here is my problem, I need a distribution that can switch between reading and writing in English and Japanese (Japanese Language Support) with out restarting the operating system.