Thursday, March 12, 2009

Internet and Computer Systems in the FOREX Business

With every passing year the interest in electronic trading is bigger, more especially trading shares and currency through Internet. A new profession came forward – this of the currency dealer. The appearance of this profession was caused by the full force of development of Internet, which enabled the exchange business to be carried over at home or at the office. The electronic platforms offered by banks and investment brokers enables all of us to go in the sea of the financial markets and to start living a difference and unknown by this moment way of life.

The development of the computer technologies, the program security and the telecommunications, as the same as the grown experience, raises the qualification level of the brokers. It it’s turn this raises the belief of the brokers in their own abilities to benefit and to lower the risk while operating. That’s why the higher level of the trading qualification leads to a higher level of trade amount.The introducing of automated dealing systems at the eighties, as the same as co-coordinating systems in the beginning of the internet trading at the end of the nineties, entirely changes the standard methods of currency trading. The dealing systems are online computer systems which integrate the banks in a united net while the co-coordinating systems become electronic brokers. The dealing systems are more reliable and much more effective which enables the dealers to realize a bigger number of concurrent transactions. Moreover, they are safer as far as the dealers can observe the executors of the transactions. Thanks to their reliability, speed and safety, the dealing systems are playing cardinal role in the expansion of the currency business.

The using of computers is taking a substantial role at many stages in the realizing of the currency business. In addition to the dealing systems the co-coordinating systems connect together the dealers all over the world in this way building up an electronic brokers market. The new office systems are ensuring a full account report, filling vouchers, keeping secretary work, procedures of lowering the risk and they account the expense for their acquisition. The present-day program products afford an opportunity to be generated all types of graphics, adding theoretically well-grounded technical indicators and favour the dealer for lon lasting using with comparatively low expense.The using of Internet makes the financial information about the currency markets, currency indexes and prognoses about the rate of exchange, easy accessible all over the world. Now there are many websites with financial information. A big role in the currency trading has the rate exchange. The speed of the electronic post makes it possible getting these prognoses in a moment. If you take out a subscription to such a service, you can get prognoses of rate-exchange by electronic post every day. Such a service you can find at the following address:

Eric Cooper is moderator of Internet Forex Club which provide to it’s members useful forex forecasting and trade recommendation service.

Advantages of Trading FOREX Over Stocks and Commodities

There is one aspect that is considered as one of the best advantages of FOREX Trading. This is related to the amount of money you need to place a trade, this is known as "margin", and in short, this is all that can be lost in a the case you had a bad trade.I state it like this because, even though I know with proper self-taught education you're NOT going to lose as much as you win anyway, I want you to know that despite thesuper-high leverage associated with FOREX trading (200:1 is possible; meaning that if you put up $1 the trading vendor will allow you to trade like you really have $200), it's still arguably less risky than futures (commodities) trading. And, forget stocks, you'll never get this type of EVERAGE in the equities market.Futures markets are often prone to sudden and dramatic moves, against which you can not protect yourself, even by trading with protective stops. Your position may beliquidated at a loss, and you’ll be liable for any resulting deficit in the account. But because of the FX markets deep liquidity and 24-hour, continuous trading, dangerous trading gaps and limit moves are eliminated. Orders are executed quickly, without slippage or partial fills. And finally,there are no margin calls -- for your protection, ALL our recommended brokers will automatically close out some or all of your open positions if your account equity fallsbelow the level required to hold the positions. Think of this as a final, automatic stop, always working on your behalf to prevent a debit balance. In fact, if you pick from our list of recommended brokers, we guarantee that you will never lose more than you have in your FOREX account.

Be a Smarter FOREX Currency Trader: Three Basic Principles

Below I will describe three basic principles that may come in handy for currency traders. They are very easy to implement and potentially take advantage of as you will see.

Principle 1

Some currency traders find that it is useful to always trade a given currency pair at the very same time every day. The reasoning for this is that most of the other traders buying or selling that currency pair may also trade at the same time. Major trading pits may also be working the exact same shift every day. This technique may be especially useful for currency traders who exploit technical analysis. Again, the reasoning for this is that it may be possible to standardize the trading conditions if one trades during the same time frame every day, if only for a very little bit. However, that small bit of standardization may yield several pips worth of profit. Nevertheless, it is readily obvious that the foreign exchange market can be very volatile and random.

Principle 2

Certain currencies trade with a certain volatility at a certain time. Once you've finished practicing your trading skills on a demo account and you decide to test the waters using your own investment capital, you may want to minimize the amount of liquidity and volatility to hedge your risk. Alternatively, you may want to increase the risk involved, and potentially increase your profit potential. (It should be noted that very heavy risk is involved under any circumstances.)

The foreign exchange market follows the sun around the world moving from the United States to Australia and New Zealand to the Far East, to Europe and finally back to the United States. Overall foreign currency trading volume is determined by which markets are open and the overlap in the times that these markets are open. Currency trading volume is relatively high 24 hours a day, but there are considerable peaks in activity when the British, European, and US markets are open simultaneously, which is from 1 pm GMT to 4 pm GMT. Pacific Rim markets, such as Japan and Hong Kong, show a dip in their trading volume while there is extensive volume in the US market at the very same time. Nevertheless, it is still possible to perform technical analysis on Pacific Rim currencies. By trading during a certain time frame, one may be able to either minimize or maximize the level of volatility (and risk) for a given currency pair.

Principle 3

Although the above is a general statement about the activity volume for certain currencies, it may be a good idea to attempt to capture the level of volatility for given currency pairs. You can potentially use Bollinger bands, a tool used by technical analysts, to quantify volatility. Bollinger bands compare volatility and relative price levels over time. Some currency traders cannot trade a day in their life without using Bollinger bands, while others may not find any use for them; it is really up to you to decide whether Bollinger bands are of any use to your specific situation.

I have described three basic principles that may potentially come in handy for currency traders in the foreign exchange market. They are very easy to implement and may reap rewards (or lack thereof) depending on market conditions. Hopefully these principles will help you come up with your own successful strategies for trading currencies in the foreign exchange market.