I have to admit, I was a bit skeptical with this one when I first read about it. I decided to give it a go since there was a money-back guarantee and I could test it out on a practice account first. It meant at least that I wasn’t seriously risking a lot of capital.
I [...]
There’s an old phrase that goes, “To make money you have to have money.” I’ve always thought that was true when it came to investing money. When you invest money, you are basically making your money work for you, and the general rule of thumb is that in order for your money to make more [...]
Factors Affecting the Global Currency Market - Part 2
Trade and Capital Flow
Countries may be said to be dependent on either trade flow or capital flow.
A country dependent on trade flow brings in the larger part of its income from by its trade or exports with other countries.
Some examples of trade flow dependent economies include:
- Canada [...]
Factors Affecting the Global Currency Market - Part 1
Many people find the ‘predictions game’ the most enjoyable aspect of Forex trading. In order to develop solid mid-range and long-range trading strategies, you have to acquire a fairly sophisticated knowledge of economics.
So, you ask, which factors most influence the global currency market?
There are 5 key areas [...]
Concept #5: Margins and Leverage
Every broker will have a minimum deposit you must meet in order to open an account, as well as minimum account levels required to trade a specific lot size.
The minimums are known as initial margins or usable margins. Some brokers might allow you to open an account at lowest ‘usable margin’ [...]
Concept #4 - Anatomy of a Trade: Bid Price, Ask Price and ‘Spread’
Forex quotes include more than just the exchange rate. They also include a bid price and an ask price. Where do these prices come from?
They come from entities known as forex market makers. These market makers consist of banks and brokerages that are [...]
Concept #3: ‘Pips’
What the heck is a ‘pip’? A pip, in Forex terms, is defined as the smallest price change an exchange rate can make. Most of the currency pairs you trade will be quoted out to four decimal places, and a shift in any of those decimals reflects a shift in price.
A ’standard’ pip [...]
Concept #2: Currency Pairs
When you buy stocks on the Stock Exchange, you have the option of buying the stock of a single company at a time, or multiple companies at a time. You may also choose to sell your stock back right away, or hold it for an indefinite period of time.
The value of stock [...]
Concept #1 Exchange Rates
As you saw from the example in the previous post on Forex Trading, the exchange rate can be defined as the the price of one currency in relation to another.
A fixed exchange rate, like the one established in 1944 by the Bretton Woods Accord, is an official rate set by monetary authorities [...]
Forex 101
There is a lot of information to cover in the subject of Forex Trading. To ensure the information is presented in a way that helps you absorb it quickly, while still getting a solid, ‘big picture’ view of how Forex works for individual retail traders, I’m going to use a ‘building-block’ approach. [...]
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