Posted by admin on February 15, 2012 under Forex Knowledge | 
The currency exchange rate is always changing. The value of one currency is determined by market supply and demand forces, by comparing it to another currency. In a currency pair, the first currency is called the “base currency”; the second currency is called the “quote currency” or “counter currency”.
When you buy a currency pair, you buy the base currency and sell the quote currency. The exchange rate tells buyers how much of the quote currency they need to buy one of the base currency. The order in a pair always stays the same, being a common approach by the industry. USD/JPY, for example, is a pair (USD = base, JPY = the quote). The order within the pair, in the way you use the term, does not change. So you either BUY it or SELL it, depending on the direction of the trade. For example: USD/JPY – you either BUY JPY using USD or you Sell JPY to get USD. On the currency rate table on the easy-forex® website you can view the way in which each pair available for trade is ordered.
Here is an example: EUR/USD 1.2500 means you need 1.25USD to buy one euro. It also means if you sell one euro you get 1.25USD. All trades involve buying one currency and selling another currency at the same time. If in the next day the Euro is rising against the USD and the exchange rate is now 1.26, for every 1 Euro that you bought, you have earned 1USD cent. Or, if you traded the opposite direction, for every EUR that you sold (at 1.25) you lost 1USD cent (since you “buy” back the EUR for 1.26).
Posted by admin on December 15, 2011 under Forex Knowledge |
The Bretton Woods Agreement, established in 1944, fixed national currencies against the dollar, and set the dollar at a rate of 35USD per ounce of gold. In 1967, a Chicago bank refused to make a loan in pound sterling to a college professor by the name of Milton Friedman because he had intended to use the funds to short the British currency. The bank’s refusal to grant the loan was due to the Bretton Woods Agreement.
This agreement aimed at establishing international monetary steadiness by preventing money from taking flight across countries, and curbing speculation in the international currencies. Prior to Bretton Woods, the gold exchange standard – dominant between 1876 and World War I – ruled over the international economic system. Under the gold exchange, currencies experienced a new era of stability because they were supported by the price of gold.
However, the gold exchange standard had a weakness of boom-bust patterns. As an economy strengthened, it would import a great deal until it ran down its gold reserves required to support its currency. As a result, the money supply would diminish, interest rates escalate and economic activity slowed to the point of recession. Ultimately, prices of commodities would hit bottom, appearing attractive to other nations, who would sprint into a buying fury that injected the economy with gold until it increased its money supply, driving down interest rates and restoring wealth into the economy. Such boom-bust patterns abounded throughout the gold standard until World War I temporarily discontinued trade flows and the free movement of gold.
The Bretton Woods Agreement was founded after World War II, in order to stabilize and regulate the international Forex market. Participating countries agreed to try to maintain the value of their currency within a narrow margin against the dollar and an equivalent rate of gold as needed. The dollar gained a premium position as a reference currency, reflecting the shift in global economic dominance from Europe to the USA. Countries were prohibited from devaluing their currencies to benefit their foreign trade and were only allowed to devalue their currencies by less than 10%. The great volume of international Forex trade led to massive movements of capital, which were generated by post-war construction during the 1950s, and this movement destabilized the foreign exchange rates established in the Bretton Woods Agreement.
1971 heralded the abandonment of the Bretton Woods in that the US dollar would no longer be exchangeable into gold. By 1973, the forces of supply and demand controlled major industrialized nations’ currencies, which now floated more freely across nations. Prices were floated daily, with volumes, speed and price volatility all increasing throughout the 1970s, and new financial instruments, market deregulation and trade liberalization emerged.
The onset of computers and technology in the 1980s accelerated the pace of extending the market continuum for cross-border capital movements through Asian, European and American time zones. Transactions in foreign exchange increased intensively from nearly $70 billion a day in the 1980s, to more than $1.5 trillion a day two decades later.
Read more about the history of gold trading.
Posted by admin on July 24, 2011 under Forex Knowledge |
Sitting on one of AGL’s main fiber backbones, The Data center operates a metro Ethernet ring based on Extreme Networks 10 Gig technology. It has Sonet-like EAPS implementation for sub 50 ms re-route times, utilizing Ethernet for efficient and affordable equipment connectivity. The ring is currently lit at 10 gig. With redundant Cisco BGP routing and switching infrastructure with cold spares our networks allow for possible equipment failures with no interruption of service. We also enjoy direct connectivity to the 56 Marietta St. TelX building in Atlanta. 56 Marietta is home to the third-richest fiber network hub in the US, giving us convenient access to every major telecommunications provider in the country.
Posted by admin on August 25, 2010 under Forex Knowledge |
House Price Indexes of USA
The HPI is a broad measure of the US movement of single-family house prices. The HPI is a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales or refinancings on the same properties. This information is obtained by reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since January 1975.
The HPI serves as a timely, accurate indicator of house price trends at various geographic levels. Because of the breadth of the sample, it provides more information than is available in other house price indexes. It also provides housing economists with an improved analytical tool that is useful for estimating changes in the rates of mortgage defaults, prepayments and housing affordability in specific geographic areas.
The HPI includes house price figures for the nine Census Bureau divisions, for the 50 states and the District of Columbia, and for Metropolitan Statistical Areas (MSAs) and Divisions.
Read more about the methodology used in House Price Indexes – HPI Technical Description .
Posted by admin on August 13, 2010 under Forex Knowledge |
Do you know how forex options affect forex market, Do they only actually affect the market when they are exercised? Does an exercise of a forex option occur at the same time as a sell-off of the option? (My opinion is that you have to exercise it then sell it to make profit when an option expires.)
5 years ago
OK, for more clarification, my view is that, you open a position at the stated price. when an option is exercised, But I don’t understand if the opened position has to be closed immediately. Correct me when I am wrong.
Posted by admin on February 27, 2010 under Forex Knowledge |
Forex margin allow long or short different currency pair
- Sellers are ASKing for a high price
- Buyers are BIDding at a lower price
- Trading is an auction
- Slippage occurs with most Market Orders
- The difference between the ASK and the BID price is the Spread
- Sellers are ASKing for a high pricen Buyers are BIDding at a lower pricen Trading is an auctionn Slippage occurs with most Market Ordersn The difference between the ASK and the BID price is the Spread
Posted by admin on under Forex Knowledge |
Forex market is tow way market
Currencies are traded in pairs,for example usd/jpy or usd/cad.every position involves the selling of one currency and the buying of another.if a trader believes the cad will appreciate against the usd.the trader can sell usd and buy cad.if one holds the opposite belief,that trader can buy usd and sell cad .the potential for profit exists because there is always movement in the exchange rates.
Posted by admin on under Forex Knowledge |
WHAT IS ZERO SUM GAME/GAIN
In forex market, zero-sum game or zer sum gain describes a situation in which a participant’s gain or loss is exactly balanced by the losses or gains of the other participant(s). If the total gains of the participants are added up, and the total losses are subtracted, they will sum to zero. Zero-sum can be thought of more generally as constant sum where the benefits and losses to all players sum to the same value of money (or utility). Cutting a cake is zero- or constant-sum, because taking a larger piece reduces the amount of cake available for others. In contrast, non-zero-sum describes a situation in which the interacting parties’ aggregate gains and losses is either less than or more than zero. Zero-sum games are also called strictly competitive.
Posted by admin on under Forex Knowledge |
WHAT MEAN FOREX
The FOREX(foreign exchange) is a interbank market established in 1971 .This market is the arena in which the currency of one country is exchanged for those of another and where settlements for international business are made.
The forex including interbank, government central banks andr commercial group.Payments for imports and exports flow through the forex markets,as well as payments for purchases and sales of assets.This is called the “consumer” forex market.There is also a “speculator” segment in the forex companies,which have large financial exposures to overseas economies participate in the foreign exchange market to offset the risks of international investing.
FOREX FEATURES
- You can trading 24 hours a day
- You can forex trading online
- Forex is larger than all other financial markets combined
