Forex Trading Daily Forecast EUR/USD 21-May-2012

CURRENCY TRADING - FOREX
Written by Ivan Yurukov   
Friday, 04 December 2009 13:42

currency-tradingCurrency trading is the simultaneous buying of one currency and selling another. Foreign Exchange Market (Forex or FX) is the largest financial market worldwide with a daily turnover of over $ 3 trillion. The majority of transactions take place in one of the major currencies: Euro, U.S. Dollar, British Pound, Swiss franc, Japanese yen, Australian dollar and Canadian dollar. The currency market differs from other financial markets in that it is not exchange centralized. The Forex market operates 24 hours a day via a computer network connecting banks, corporations, brokers and individual investors. Trading begins each day by New Zealand, then in Sydney, later Tokyo, London and New York to the coast of California.

Forex markets and the prices of currencies are influenced mainly by international trade and investment flows. Also the factors affecting securities markets: economic and political conditions, especially the main interest rates, inflation and political instability. Like other financial instruments, foreign exchange rates include price "Buy" (Bid) and "For Sale" (Ask).

Buy Price (Bid) is the price at which the dealer buys and investors sell currency.

Sale Price (Ask) is the price at which the dealer sales and investors buy currencies.

Spread (Spred) is the difference between the buying rate and selling rate. Spread is the cost paid by the investor for the transaction.
Currencies are quoted to four or five characters after the decimal point, such as EUR / USD 1.5000/1.5003 as the last digit is called "pip". For most currencies a pip is 0.0001 from the current rate. Exceptions are the pairs in which the second position is Japanese Yen (JPY), where a pip equals to 0.01. Investors make their decisions on trade of technical or fundamental analysis. Technical analysis uses charts, mathematical models, trend lines, levels of support and resistance and other resources. Fundamental approach is based on decisions after economic analysis.
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Last Updated on Friday, 07 May 2010 09:31