Thursday, May 28, 2009
Forex Trading Systems
Forex currency trading system reviews from independent writers top 10 forex systems reviewed and rated. Forex trading systems the internets 1 source for unbiased reviews of the latest forex trading system, forex trading courses and forex brokerage account the place to learn forex trading, learn currency. Forex trading system, forex trading course, brokerage account reviews online forex trading system, global foreign currency, exchange trading & cfds. Online forex currency trading systems,automated foreign exchange,forex who are the players in the online forex market the world, today, is witnessing all sorts of businesses there are some businesses which are working on smaller scales, while others. Forex trading systems forex strategies blog archive forex forex robot trading myths to lose & facts to win may 27th, 2008 by admin the forex robot trading or you can say automated forex trading is going to be the next hot favorite.Forex currency trading systems reviewed a forex software trading system - learn how to trade the foreign exchanges the easy way. Forex trading systems market forex offers investors a complete and direct access to the worldwide forex currency trading markets, no need to download software, forms, simply signup and start trading. Online forex trading system, global foreign currency & exchange broker . Forex trading software system download the ultimate beginner's guide to forex for free how to win at forex without losing your shirt
Trading System Scams
If you have a look for trading systems on the Internet, there are plenty of them for sale - all promising to make you millions.When something seems too good to be true, it usually is. Many of the trading systems for sale are unprofitable. As well as wasting your money, you could lose your trading capital.Check these points when looking at a trading system to avoid becoming another victim:AccuracyMost trading millionaires use systems that are 50-60% accurate. It is virtually impossible in the real world to get 90% accuracy, but that is what some system vendors claim. As soon as you see that, you know that the figure is not realistic, and may be based on a very limited set of test trades.Real life performanceIt is possible to tweak a trading system to get fabulous results on the right set of test data. You simply adjust it to maximise profit. However it is one thing to do that, and another for it to work in real life. Always check to see whether test results are hypothetical, or whether they have been achieved in actual trading.A good system should have average losses smaller than average profits.Disclosure of approachAn undisclosed approach is called a "black box" system. You need a lot of faith to use a system that doesn't state how it works. It is preferable to go for a system that provides some information on the approach usedLongevityA system that has been around for a while, and has been reviewed and checked out by a number of people (who are not selling it) is preferable to the new kid on the block. Many trading systems spring up, and then quietly disappear once word gets around that they don't work.Exotic or secret technologiesInnovation is a good thing, but beware of a system vendor who states that their system has some new secret trading approach or includes secret, proprietary approaches used by a hedge fund or investment bank, not previously available.Iif the system cost millions of dollars for a hedge fund to develop and was truly profitable, would it be for sale for $79.95?Amount of capitalIf the trading system needs $50,000 and you have $1,000, then it is a non starter for you.DrawdownsDrawdowns are the maximum negative movement of a trading account. If the system has drawdowns of (say) 30%, you are in for a wild ride, and will need a lot of risk capital. You should be comfortable with the risk factor of the system in real life trading, and this includes the drawdowns.PracticalityDoes the system make hundreds of trades a week, and rely on split second timing? If so, it may not be practical to trade, unless you have some sort of automation to handle the trades. It may not be possible to execute your trades on time if the system relies on very short term movements.Take care when selecting a trading system - there are a lot of scams out the
FAP Turbo - Forex Auto Pilot Turbo free download
FAPTURBO IS A COMBINATION OF 2 STRATEGIES:• Short Term Scalping Strategy• Long Term Advanced FAP strategyBoth strategies are built inside one FAPTURBO expert advisor and can be switched on and off using UseScalperStrategy parameter in FAPTURBO settings.Each strategy uses its own designed timeframe and currencies so be sure you use the strategy on proper currency pair and timeframe. Read the Guide in the download file for more details.Only 1 strategy can work on one Chart at the same time but you can open several charts to run different strategies within one trading account. More details on how to do that can be found later in this Guide.FAPTURBO scalper is a unique system that usually makes 1-5 trades a day aiming for small take profit value (from 6 to 10 pips) when the market is stable enough (often during nighttime in Europe).By default scalper strategy does not make any trades during day time (GMT) and does not trade on Fridays, where the market is too unpredictable. (and of course no trades on weekends)Scalper strategy is very safe because it has a low value stop loss limit and advanced algorithm that closes the trades according to inner indicators. Stealth Mode protects you from cheating on the broker side. Using the stealth mode the take profit and stop loss values are not displayed to broker. Scalper strategy works on EURGPB, EURCHF, GBPCHF or USDCAD currency pairs on M15 timeframe only.Long Term Advanced FAP Strategy FAPTURBO uses advanced FAPS (ForexAutoPilot) Algorithm.The Trading system of the ForexAutoPilot expert advisor is based on several modern Forex indicators such as Alligator, Fractals, DeMarker, and William's Percent Rate. The system detects a good trend and confirms it using internal indicators, then opens the trades to make maximum profit for you. ForexAutoPilot advisor monitors each open trade carefully and closes it if it reaches the takeprofit limit when the trade is successful.FAPTURBO Longterm FAP STRATEGY was optimized for the best performance on EURUSD pair M1 (1 minute timeframe).FAPTURBO Long Term Strategy is optimized to avoid trading during risky market conditions. No trades will be opened on such dangerous days. Please have patience! If it does not open any trades for a week or two that means the market is in a risky zone!
Forex Funnel - Martingale EA
Requirement :- Minimum equity of 2500$ per 0.01 lot traded so if you wish to trade 0.1 lot then you should have 25000$- Leverage : 1:200 or higherInstruction :- Copy the .ex4 to your Metabroker\Experts folder and the .dll file to your libraries folderThen open your USD/JPY chart , 1H and active the EA , in the setting tick the box say Allow live trading and the "Allow import of external experts" box.Setting : - You can change the lot size to 0.01 per $2500 equity.- The use time function is used if there is a big news announcement i.e non-farm payroll comes out on the first Friday of everymonth.This will stop the EA from making trades on that certain day so if you want to set it not to trade on that Friday, you would have "usetime" set to true then Sunday, Monday, Tuesday, Wednesday, Thursday, Saturday set to false and Friday set to true.Then once Friday has passed simply turn "usetime" to false again.Everything else would run on autopilot, please be informed that if trading 0.01 lots make sure your broker support this otherwise the system will not trade.Good luck !!!Disclaimer : This is full test version only. Use it at your legal-own-risk. For legal authentication please visit original website !
Trading from home FRED Expert advisor
Automatic Trading Expert Advisor F.R.ED full test version Apply to a EUR USD 30 min chart Important Instructions:After you set up, wait for trades to be placed.Depend on current market conditions, you could see trades placed within the hours after you set up the system. Normally, you should see trades placed between 24-36 hoursFRED will open trade a few times a week when its internal indicator find the proper market conditions to open trades. FRED doesn't have to open many trades or trade every single day.The goal is to make a profit, not to make many trades. Usually FRED open 2-15 trades a week ! No trades will be performed during the weekend so there is no need to turm off the EA, it will sleep and continue to trade as soon as the market is opened again.Lot size and Risk : For every 0.1 lot size of the EU your account will use approx $70. So I recommend using these lot size setting for different account sizes :Account balance $500 : 0.1 lot size$1000 - 5000 : 0.5 - 1 lot size $5000 - 10000 : 1 - 5 lot size Disclaimer : This is full test version only. Use it at your legal-own-risk. For legal authentication please visit original website !
Finding the Right Forex Currency Trading System
Welcome to this FREE Forex Currency Trading Systems Guide!
When it comes to choosing our Forex currency trading system we want to ask the question of ”how much is it going to cost?”. This is in reference to the cost of getting set up with the right software and information. The cost of getting started can range depending on your trading system set up, but you need to be ready to make an investment of around $300. If you stop to think about it, a few hundred dollars is a tiny investment for something that can very fast be brining you profits in the $50,000 mark or even more.
Forex Goldminer indicator
Once you set up the goldminer1 & goldminer2 like above on the 1 hour chart or above you are looking for the signals which are as follows :RED + PURPLE ARROW = SELLBLUE + YELLOW ARROW = BUYHow you exit will be determined by which timeframe you are using, I suggest using the same TP and SL i.e 30 pips TP 30 pips SL
Link downloadGoldminer1 Goldminer2
Link downloadGoldminer1 Goldminer2
Forex Technical Analysis
The pre-planned buyers' positions from the key supports have been realized with attainment of minimal assumed target. OsMA trend indicator having generally marked the feature of incompletion of bearish activity does not give grounds to make a firm choice of planning priorities for today. Hence and because of presumptions about possible range movement of the rate, we assume a possibility of another test of the nearest supports 1.1500/20, where it is recommended to evaluate the activity development of both parties according to the charts of shorter time interval. For short-term buyers' positions on condition of formation of topping signals the targets will be 1.1560/80, 1.1620/40 and/or further breakout variant up to 1.1680/1.1700, 1.1760/80, 1.1820/40. An alternative for sells will be below 1.1460 with the targets 1.1400/20, 1.1320/40, 1.1240/60.
GBP
Low activity of the parties as a result of previous trading day did not bring in any changes to earlier composed trading plans. As before without any priorities of planning direction choice and presumptions about possible range movement of the rate, we assume a possibility of test of upper boundary of Ichimoku cloud at 1.4720/40, where it is recommended to evaluate the activity development of both parties according to the charts of shorter time interval. For short-term sells on condition of formation of topping signals the targets will be will be 1.4640/60, 1.4580/1.4600 and/or further breakout variant up to 1.4520/40, 1.4460/80, 1.4380/1.4400. An alternative for buyers will be above 1.4810 with the targets 1.4860/80, 1.4940/60, 1.5000/20.
JPY
Low parties' activity as a result of previous trading day did not bring in any changes to earlier opened short positions. Hence as before because of presumptions about further range movement of the rate for opened sells the targets will be 99.60/80, 99.00/20 and/or further breakout variant up to 98.40/60, 97.80/98.00, 97.00/40. An alternative for buyers will be above 100.80 with the targets 101.20/40, 101.80/102.00.
EUR
The pre-planned short positions from the key resistance range have been realized with attainment of minimal assumed target. OsMA trend indicator having marked the feature of bullish incompletion with general activity parity of both parties gives grounds to presume further rate rise to the boundaries of Ichimoku cloud at 1.3220/40, where it is recommended to evaluate the activity development of both parties according to the charts of shorter time interval. For short-term sells on condition of formation of topping signals the targets will be 1.3160/80, 1.3080/1.3100 and/or further breakout variant up to 1.3020/40, 1.2940/60, 1.2820/60. An alternative for buyers will be above 1.3360 with the targets 1.3400/20, 1.3460/80, 1.3540/80.
GBP
Low activity of the parties as a result of previous trading day did not bring in any changes to earlier composed trading plans. As before without any priorities of planning direction choice and presumptions about possible range movement of the rate, we assume a possibility of test of upper boundary of Ichimoku cloud at 1.4720/40, where it is recommended to evaluate the activity development of both parties according to the charts of shorter time interval. For short-term sells on condition of formation of topping signals the targets will be will be 1.4640/60, 1.4580/1.4600 and/or further breakout variant up to 1.4520/40, 1.4460/80, 1.4380/1.4400. An alternative for buyers will be above 1.4810 with the targets 1.4860/80, 1.4940/60, 1.5000/20.
JPY
Low parties' activity as a result of previous trading day did not bring in any changes to earlier opened short positions. Hence as before because of presumptions about further range movement of the rate for opened sells the targets will be 99.60/80, 99.00/20 and/or further breakout variant up to 98.40/60, 97.80/98.00, 97.00/40. An alternative for buyers will be above 100.80 with the targets 101.20/40, 101.80/102.00.
EUR
The pre-planned short positions from the key resistance range have been realized with attainment of minimal assumed target. OsMA trend indicator having marked the feature of bullish incompletion with general activity parity of both parties gives grounds to presume further rate rise to the boundaries of Ichimoku cloud at 1.3220/40, where it is recommended to evaluate the activity development of both parties according to the charts of shorter time interval. For short-term sells on condition of formation of topping signals the targets will be 1.3160/80, 1.3080/1.3100 and/or further breakout variant up to 1.3020/40, 1.2940/60, 1.2820/60. An alternative for buyers will be above 1.3360 with the targets 1.3400/20, 1.3460/80, 1.3540/80.
Three Simple Rules Of Winning Traders
About two weeks I went on CNBC and predicted that range will rule the currency markets for the foreseeable future. The price of EURUSD at the time of broadcast? 1.2630. The price of EURUSD at close of trade today? 1.2590. So range reigns in the currency market as every rally fails and every decline proves false breaking the hearts of both bulls and bears and that dynamic will probably last for the rest of this year. Thus with little new to say and holiday shortened week ahead of us I thought we'd change the format this week and skips the price action review concentrating instead understanding the basic building blocks of successful trading.
This past week in Kuwait I gave a presentation titled "3 M's that Drive the Currency Market". It showcased a simple analytical framework created by K and I to explain most of the price movement in currencies. The 3 M's stand for Macro - broad economic and political themes, Micro - day to day economic releases and Monetary - for monetary policy of the G-10 nations. The 3M's model, though relatively straightforward, does a very good job of encapsulating virtually all of the catalysts in the FX market.
As I was flying back to US, my thoughts drifted to the 3M idea and I realized that trading itself can also be summarized in a 3 variable model - a model I call the Three Simple Rules Of Winning Traders.
Rule 1 - Develop an opinion.
Whenever I hear traders tell me, "I don't have any opinion, I just trade price action." I always smile ruefully and think to myself that the trader is both an idiot and a liar. The fact of the matter is that every time you enter the market you are implicitly rendering an opinion on the future movement of price. The difference between those traders who do so implicitly versus those who put forth an explicit reason for their trade is that the former have no clue of what they are doing while the later at least try to figure out the story behind the trade.
It goes without saying that I have little respect for traders who mechanically follow price action like mindless robots. In trading you get paid not for what is happening now, but for what will happen in the future and if you cannot figure out what is likely to drive price towards your target you are just a lemming in the market. Right or wrong, developing an opinion is the cornerstone of a winning strategy.
Rule 2 - Let Price Confirm Your Thesis
To politely paraphrase a very crude Wall Street saying, opinions are like faces - everyone has one. Developing an opinion even one that is ultimately correct is utterly worthless if the market happens to disagree with your assessment. The history if trading is littered with brilliant analysts who were absolutely correct on their calls and yet were bankrupted by the vagaries of price action before they were ever proven right. Your opinion may be dead on, but as traders it is price movement, not opinion that we are trading. Until and unless price corroborates your opinion you have no entry signal for your trade.
Rule 3 - Manage Your Trade
More than anything else great traders are good money managers. I've always believed that you can put two great traders on the opposite side of a position and often both of them will wind up making money. On the other hand put two novices in the same spot and they will more than likely both lose. Trading above all the art of managing the unknown. Let's say you own a sandwich shop in some strip mall in Nebraska. Most likely you would know to within 10 or 20 sandwiches how many customers you will have every single day of the year. Now imagine that sandwich shop was the FX market. The day to day variance would drive most sandwich shop owners insane. Some days you may sell 500 sandwiches, other days you may have to dump all your food supplies into the garbage as no business came through your door. That's why trading at its core is always about managing risk. Every time you trade the operating principle is - Hope for the Best Prepare for the Worst.
The only way we've been able to control risk and at the same time participate in the market is by always cutting our position in half once a short profit target is met. No matter what anyone tell you, there is simply no way to know a priori if any given trade will be successful. At BKT we really believe that half a loaf is better than none. Success in trading is contingent not only on your analysis but on your ability to properly manage your position. That is why the game is hard. To be a winning trader you must be both - a good analyst and an an excellent risk manager..
This past week in Kuwait I gave a presentation titled "3 M's that Drive the Currency Market". It showcased a simple analytical framework created by K and I to explain most of the price movement in currencies. The 3 M's stand for Macro - broad economic and political themes, Micro - day to day economic releases and Monetary - for monetary policy of the G-10 nations. The 3M's model, though relatively straightforward, does a very good job of encapsulating virtually all of the catalysts in the FX market.
As I was flying back to US, my thoughts drifted to the 3M idea and I realized that trading itself can also be summarized in a 3 variable model - a model I call the Three Simple Rules Of Winning Traders.
Rule 1 - Develop an opinion.
Whenever I hear traders tell me, "I don't have any opinion, I just trade price action." I always smile ruefully and think to myself that the trader is both an idiot and a liar. The fact of the matter is that every time you enter the market you are implicitly rendering an opinion on the future movement of price. The difference between those traders who do so implicitly versus those who put forth an explicit reason for their trade is that the former have no clue of what they are doing while the later at least try to figure out the story behind the trade.
It goes without saying that I have little respect for traders who mechanically follow price action like mindless robots. In trading you get paid not for what is happening now, but for what will happen in the future and if you cannot figure out what is likely to drive price towards your target you are just a lemming in the market. Right or wrong, developing an opinion is the cornerstone of a winning strategy.
Rule 2 - Let Price Confirm Your Thesis
To politely paraphrase a very crude Wall Street saying, opinions are like faces - everyone has one. Developing an opinion even one that is ultimately correct is utterly worthless if the market happens to disagree with your assessment. The history if trading is littered with brilliant analysts who were absolutely correct on their calls and yet were bankrupted by the vagaries of price action before they were ever proven right. Your opinion may be dead on, but as traders it is price movement, not opinion that we are trading. Until and unless price corroborates your opinion you have no entry signal for your trade.
Rule 3 - Manage Your Trade
More than anything else great traders are good money managers. I've always believed that you can put two great traders on the opposite side of a position and often both of them will wind up making money. On the other hand put two novices in the same spot and they will more than likely both lose. Trading above all the art of managing the unknown. Let's say you own a sandwich shop in some strip mall in Nebraska. Most likely you would know to within 10 or 20 sandwiches how many customers you will have every single day of the year. Now imagine that sandwich shop was the FX market. The day to day variance would drive most sandwich shop owners insane. Some days you may sell 500 sandwiches, other days you may have to dump all your food supplies into the garbage as no business came through your door. That's why trading at its core is always about managing risk. Every time you trade the operating principle is - Hope for the Best Prepare for the Worst.
The only way we've been able to control risk and at the same time participate in the market is by always cutting our position in half once a short profit target is met. No matter what anyone tell you, there is simply no way to know a priori if any given trade will be successful. At BKT we really believe that half a loaf is better than none. Success in trading is contingent not only on your analysis but on your ability to properly manage your position. That is why the game is hard. To be a winning trader you must be both - a good analyst and an an excellent risk manager..
Forex Auto Run
If You Want To Make Serious Money In Forex, You Simply Need To Have The Best System Working For You...
Do you want to make consistent profits trading Forex, without wasting hours in front of your computer?
Do you want to trade Forex but you don't want to waste thousands of dollars on courses or systems that might not teach you how to do it right?
Did you lose money when you tried other Forex systems and courses?
Take a look at Forex Auto Run Features:
Easy to install;
Easy to use;
10 automated systems;
Good for beginners, intermediate and advanced traders;
10 Automatic systems with good risk/reward ratios;
Limited losses;
Can be used with any MT4 broker;
Just press a button and start making money;
Highly flexible: choose 1 system to trade or trade 10 at once... It's up to you.
Forex Auto Run works with every currency pairs;
You can literally be anywhere, doing whatever you like, and make money at the same time
Do you want to make consistent profits trading Forex, without wasting hours in front of your computer?
Do you want to trade Forex but you don't want to waste thousands of dollars on courses or systems that might not teach you how to do it right?
Did you lose money when you tried other Forex systems and courses?
Take a look at Forex Auto Run Features:
Easy to install;
Easy to use;
10 automated systems;
Good for beginners, intermediate and advanced traders;
10 Automatic systems with good risk/reward ratios;
Limited losses;
Can be used with any MT4 broker;
Just press a button and start making money;
Highly flexible: choose 1 system to trade or trade 10 at once... It's up to you.
Forex Auto Run works with every currency pairs;
You can literally be anywhere, doing whatever you like, and make money at the same time
Street Smart Forex
Winning traders use COMMON SENSE.
First of all you need to recognize that your brain is the best possible weapon that you have on your disposal. Always ready and free of charge. All of those fancy TA tools and trading software are just that – YOUR tools. They don't work on their own. You need to understand how and when to use them. And what is more important – when NOT to use them.
What does "Street Smart Forex" trading system cover?
Street Smart Forex is a lethal combination of trading techniques that are easy to implement and at the same time brutally effective
It includes both day trading and swing trading strategies
It is developed as a result of years of trading experience
Can be tested without risking any trading capital
Strategies are explained in great detail with lots of real life examples, no question is left unanswered
There is no fluff, it doesn't talk about history of forex market etc...
Protects trading capital to the extent that the probability of losing is almost non-existent
It can be applied from any country and at any time of the day
Applies to all major currency pairs
You can start trading with as little as $500 and you don't need any extra products to implement the system
System is explained in a step by step fashion
identify if you are in a sideways market
If not in the sideways market identify the long term trend
Enter the market on the signal that is in tune with the long term trend
Calculate the signal strength based on my proprietary formula
Extract as much profit as possible based on my recursive trailing stop formula
You will also learn how to obtain the most reliable real time quotes and charting software
How to use the info from the previous trading day to your advantage
How to prepare for the trading day
How to use volatility to your advantage, which entry signals NOT to take, using power of leverage
First of all you need to recognize that your brain is the best possible weapon that you have on your disposal. Always ready and free of charge. All of those fancy TA tools and trading software are just that – YOUR tools. They don't work on their own. You need to understand how and when to use them. And what is more important – when NOT to use them.
What does "Street Smart Forex" trading system cover?
Street Smart Forex is a lethal combination of trading techniques that are easy to implement and at the same time brutally effective
It includes both day trading and swing trading strategies
It is developed as a result of years of trading experience
Can be tested without risking any trading capital
Strategies are explained in great detail with lots of real life examples, no question is left unanswered
There is no fluff, it doesn't talk about history of forex market etc...
Protects trading capital to the extent that the probability of losing is almost non-existent
It can be applied from any country and at any time of the day
Applies to all major currency pairs
You can start trading with as little as $500 and you don't need any extra products to implement the system
System is explained in a step by step fashion
identify if you are in a sideways market
If not in the sideways market identify the long term trend
Enter the market on the signal that is in tune with the long term trend
Calculate the signal strength based on my proprietary formula
Extract as much profit as possible based on my recursive trailing stop formula
You will also learn how to obtain the most reliable real time quotes and charting software
How to use the info from the previous trading day to your advantage
How to prepare for the trading day
How to use volatility to your advantage, which entry signals NOT to take, using power of leverage
Forex Point and Figure System
Discover a time-tested method of profiting in the forex!
Point and figure charting is one of the oldest methods around. It's definitely a "lost art" among traders. Point and figure charts offer crystal clear buy and sell signals, price targets, exit points, and risk management. It's a system that the forex trading world has yet to embrace.
Even up to this day, there's no one talking about, thinking about or even trading point and figure charting in forex...until now.
When you order the FxPnF System, you'll gain a whole new understanding of how the forex market works and, most importantly, how you can make a killing trading currencies.
A few of the many benefits include:
You will learn how to clearly identify trends and entry signals.
You will know when and where to take huge profits.
You will learn how to set tight stops.
You get access to proprietary indicators.
You get a custom MetaTrader 4 point and figure charting program.
You will become a highly profitable forex trader, I guarantee it!
Point and figure charting is one of the oldest methods around. It's definitely a "lost art" among traders. Point and figure charts offer crystal clear buy and sell signals, price targets, exit points, and risk management. It's a system that the forex trading world has yet to embrace.
Even up to this day, there's no one talking about, thinking about or even trading point and figure charting in forex...until now.
When you order the FxPnF System, you'll gain a whole new understanding of how the forex market works and, most importantly, how you can make a killing trading currencies.
A few of the many benefits include:
You will learn how to clearly identify trends and entry signals.
You will know when and where to take huge profits.
You will learn how to set tight stops.
You get access to proprietary indicators.
You get a custom MetaTrader 4 point and figure charting program.
You will become a highly profitable forex trader, I guarantee it!
News Profiteer
Currency Market Moves Because Of Fundamental News Releases!
Taking advantage of fundamentals is ALL that separates the pro trader from the wannabes.
And the best part is... You don't need to be an economists or have a degree in finance to make money with news.
Take two traders, both just beginners, both took the same beginner's Forex course and learned the basics of trading. Both have similar education and background, and both love trading and their goals are to trade for living for the rest of their lives. Let's call them "John" and "Henry".
John spends all his time studying the chart, he experiments with new indicators, new parameters, and constantly trying out new trade ideas. He gets his emotions in line. But he never realizes the fundamental factor to Forex trading... as a matter of fact, he purposely ignores news releases and he never makes the simple correction that will make his trades profitable.
John, later in his life, is the guy you might find frequenting discussion forums, public online trade (chat) rooms, posting some amazing trades, but never ever show you his live account statement... that is, if he even have a live account at this point.
Henry, on the other hand, early on senses that there must be more to Forex trading than just looking at the chart. He may not understand the fundamental news effect to the world economy, but he makes a simple adjustment in the way he looks at trading. Despite the warning from die-hard technical traders to ignore the news, he trusts his intuition and does what's right... not what people told him.
Henry becomes a professional trader. You never see him frequenting Forex discussion forums, or online trade rooms, because he's too busy making a fortune in his live account...
This is NOT a bogus comparison. You CANNOT become a successful Forex trader as long as you think and act like 95% of Forex traders, who end up losing.
Taking advantage of fundamentals is ALL that separates the pro trader from the wannabes.
And the best part is... You don't need to be an economists or have a degree in finance to make money with news.
Take two traders, both just beginners, both took the same beginner's Forex course and learned the basics of trading. Both have similar education and background, and both love trading and their goals are to trade for living for the rest of their lives. Let's call them "John" and "Henry".
John spends all his time studying the chart, he experiments with new indicators, new parameters, and constantly trying out new trade ideas. He gets his emotions in line. But he never realizes the fundamental factor to Forex trading... as a matter of fact, he purposely ignores news releases and he never makes the simple correction that will make his trades profitable.
John, later in his life, is the guy you might find frequenting discussion forums, public online trade (chat) rooms, posting some amazing trades, but never ever show you his live account statement... that is, if he even have a live account at this point.
Henry, on the other hand, early on senses that there must be more to Forex trading than just looking at the chart. He may not understand the fundamental news effect to the world economy, but he makes a simple adjustment in the way he looks at trading. Despite the warning from die-hard technical traders to ignore the news, he trusts his intuition and does what's right... not what people told him.
Henry becomes a professional trader. You never see him frequenting Forex discussion forums, or online trade rooms, because he's too busy making a fortune in his live account...
This is NOT a bogus comparison. You CANNOT become a successful Forex trader as long as you think and act like 95% of Forex traders, who end up losing.
Forex Breakout System
Learn to trade Forex like a Bank Trader..." "Bank Traders are Range Traders"
First, a Few Truths about the Forex Market...
If you trade Forex without a system - you will lose! You need a system and good money management to have an advantage in the market.
The market is always right. When you win it's always because you followed the market. Your trade will not affect the market, so why try and go against the trend. "run with the bulls" and "follow the crowd"
90% of traders will give their money to the 10% who know what they are doing. The Forex market is a zero sum game. The 10% who know what they are doing will happily take your money - nothing personal. They have no emotion! That is why they are successful!
The Forex market is $3-trillion a day market driven by the banks There is a lot of money flowing through the market. The tiniest piece of this pie is enough for your wildest dreams!
Most traders with a system lose because they over trade. When you over trade, you are not following the rules. You think you can time it better, or, you feel lucky and trade larger positions. You will always get burned.
These are the simple truths about the Forex market. Truths are usually gained from experience and always cost you more that you bargained for. Use our tried and tested experience to your advantage and become one of the 10% who make real money.
What is Different About This System..
Most EA's you buy you don't really understand. The mechanics are always a "secret"......yet you buy them.
Many use excessive risk models yet you will put them on your live account immediately because they looked impressive?
Many use complicated indicators which only work in certain market conditions.
Other EA's don't offer you flexibility
Do you watch the news channels?
Here's how we do it...
We design automated trading tools that traders understand!
We teach you the concept and set you free to explore the options for yourself.
We give the trader full control and understanding of the automation capabilities.
We give you the flexibility to change any of the variables to suit your needs.
We give you a custom indicator to do your own highly accurate visual back testing.
We help you take the emotion out of trading!! The system has no emotions. Let it trade for you.
We call the "News" channel the "History Channel"
First, a Few Truths about the Forex Market...
If you trade Forex without a system - you will lose! You need a system and good money management to have an advantage in the market.
The market is always right. When you win it's always because you followed the market. Your trade will not affect the market, so why try and go against the trend. "run with the bulls" and "follow the crowd"
90% of traders will give their money to the 10% who know what they are doing. The Forex market is a zero sum game. The 10% who know what they are doing will happily take your money - nothing personal. They have no emotion! That is why they are successful!
The Forex market is $3-trillion a day market driven by the banks There is a lot of money flowing through the market. The tiniest piece of this pie is enough for your wildest dreams!
Most traders with a system lose because they over trade. When you over trade, you are not following the rules. You think you can time it better, or, you feel lucky and trade larger positions. You will always get burned.
These are the simple truths about the Forex market. Truths are usually gained from experience and always cost you more that you bargained for. Use our tried and tested experience to your advantage and become one of the 10% who make real money.
What is Different About This System..
Most EA's you buy you don't really understand. The mechanics are always a "secret"......yet you buy them.
Many use excessive risk models yet you will put them on your live account immediately because they looked impressive?
Many use complicated indicators which only work in certain market conditions.
Other EA's don't offer you flexibility
Do you watch the news channels?
Here's how we do it...
We design automated trading tools that traders understand!
We teach you the concept and set you free to explore the options for yourself.
We give the trader full control and understanding of the automation capabilities.
We give you the flexibility to change any of the variables to suit your needs.
We give you a custom indicator to do your own highly accurate visual back testing.
We help you take the emotion out of trading!! The system has no emotions. Let it trade for you.
We call the "News" channel the "History Channel"
Top 10 Mistakes forex Traders Make
Achieving success in futures trading requires avoiding numerous pitfalls as much, or more, than it does seeking out and executing winning trades. In fact, most professional traders will tell you that it's not any specific trading methodologies that make traders successful, but instead it's the overall rules to which those traders strictly adhere that keep them "in the game" long enough to achieve success.
Following are 10 of the more prevalent mistakes I believe traders make in futures trading. This list is in no particular order of importance.
1. Failure to have a trading plan in place before a trade is executed. A trader with no specific plan of action in place upon entry into a futures trade does not know, among other things, when or where he or she will exit the trade, or about how much money may be made or lost. Traders with no pre-determined trading plan are flying by the seat of their pants, and that's usually a recipe for a "crash and burn."
2. Inadequate trading assets or improper money management. It does not take a fortune to trade futures markets with success. Traders with less than $5,000 in their trading accounts can and do trade futures successfully. And, traders with $50,000 or more in their trading accounts can and do lose it all in a heartbeat. Part of trading success boils down to proper money management and not gunning for those highly risky "home-run" type trades that involve too much trading capital at one time.
3. Expectations that are too high, too soon. Beginning futures traders that expect to quit their "day job" and make a good living trading futures in their first few years of trading are usually disappointed. You don't become a successful doctor or lawyer or business owner in the first couple years of the practice. It takes hard work and perseverance to achieve success in any field of endeavor--and trading futures is no different. Futures trading is not the easy, "get-rich-quick" scheme that a few unsavory characters make it out to be.
4. Failure to use protective stops. Using protective buy stops or sell stops upon entering a trade provide a trader with a good idea of about how much money he or she is risking on that particular trade, should it turn out to be a loser. Protective stops are a good money-management tool, but are not perfect. There are no perfect money-management tools in futures trading.
5. Lack of "patience" and "discipline." While these two virtues are over-worked and very often mentioned when determining what unsuccessful traders lack, not many will argue with their merits. Indeed. Don't trade just for the sake of trading or just because you haven't traded for a while. Let those very good trading "set-ups" come to you, and then act upon them in a prudent way. The market will do what the market wants to do--and nobody can force the market's hand.
6. Trading against the trend--or trying to pick tops and bottoms in markets. It's human nature to want to buy low and sell high (or sell high and buy low for short-side traders). Unfortunately, that's not at all a proven means of making profits in futures trading. Top pickers and bottom-pickers usually are trading against the trend, which is a major mistake.
7. Letting losing positions ride too long. Most successful traders will not sit on a losing position very long at all. They'll set a tight protective stop, and if it's hit they'll take their losses (usually minimal) and then move on to the next potential trading set up. Traders who sit on a losing trade, "hoping" that the market will soon turn around in their favor, are usually doomed.
8. "Over-trading." Trading too many markets at one time is a mistake--especially if you are racking up losses. If trading losses are piling up, it's time to cut back on trading, even though there is the temptation to make more trades to recover the recently lost trading assets. It takes keen focus and concentration to be a successful futures trader. Having "too many irons in the fire" at one time is a mistake.
9. Failure to accept complete responsibility for your own actions. When you have a losing trade or are in a losing streak, don't blame your broker or someone else. You are the one who is responsible for your own success or failure in trading. You make the trading decisions. If you feel you are not in firm control of your own trading, then why do you feel that way? You should make immediate changes that put you in firm control of your own trading destiny.
10. Not getting a bigger-picture perspective on a market. One can look at a daily bar chart and get a shorter-term perspective on a market trend. But a look at the longer-term weekly or monthly chart for that same market can reveal a completely different perspective. It is prudent to examine longer-term charts, for that bigger-picture perspective, when contemplating a trade.
Following are 10 of the more prevalent mistakes I believe traders make in futures trading. This list is in no particular order of importance.
1. Failure to have a trading plan in place before a trade is executed. A trader with no specific plan of action in place upon entry into a futures trade does not know, among other things, when or where he or she will exit the trade, or about how much money may be made or lost. Traders with no pre-determined trading plan are flying by the seat of their pants, and that's usually a recipe for a "crash and burn."
2. Inadequate trading assets or improper money management. It does not take a fortune to trade futures markets with success. Traders with less than $5,000 in their trading accounts can and do trade futures successfully. And, traders with $50,000 or more in their trading accounts can and do lose it all in a heartbeat. Part of trading success boils down to proper money management and not gunning for those highly risky "home-run" type trades that involve too much trading capital at one time.
3. Expectations that are too high, too soon. Beginning futures traders that expect to quit their "day job" and make a good living trading futures in their first few years of trading are usually disappointed. You don't become a successful doctor or lawyer or business owner in the first couple years of the practice. It takes hard work and perseverance to achieve success in any field of endeavor--and trading futures is no different. Futures trading is not the easy, "get-rich-quick" scheme that a few unsavory characters make it out to be.
4. Failure to use protective stops. Using protective buy stops or sell stops upon entering a trade provide a trader with a good idea of about how much money he or she is risking on that particular trade, should it turn out to be a loser. Protective stops are a good money-management tool, but are not perfect. There are no perfect money-management tools in futures trading.
5. Lack of "patience" and "discipline." While these two virtues are over-worked and very often mentioned when determining what unsuccessful traders lack, not many will argue with their merits. Indeed. Don't trade just for the sake of trading or just because you haven't traded for a while. Let those very good trading "set-ups" come to you, and then act upon them in a prudent way. The market will do what the market wants to do--and nobody can force the market's hand.
6. Trading against the trend--or trying to pick tops and bottoms in markets. It's human nature to want to buy low and sell high (or sell high and buy low for short-side traders). Unfortunately, that's not at all a proven means of making profits in futures trading. Top pickers and bottom-pickers usually are trading against the trend, which is a major mistake.
7. Letting losing positions ride too long. Most successful traders will not sit on a losing position very long at all. They'll set a tight protective stop, and if it's hit they'll take their losses (usually minimal) and then move on to the next potential trading set up. Traders who sit on a losing trade, "hoping" that the market will soon turn around in their favor, are usually doomed.
8. "Over-trading." Trading too many markets at one time is a mistake--especially if you are racking up losses. If trading losses are piling up, it's time to cut back on trading, even though there is the temptation to make more trades to recover the recently lost trading assets. It takes keen focus and concentration to be a successful futures trader. Having "too many irons in the fire" at one time is a mistake.
9. Failure to accept complete responsibility for your own actions. When you have a losing trade or are in a losing streak, don't blame your broker or someone else. You are the one who is responsible for your own success or failure in trading. You make the trading decisions. If you feel you are not in firm control of your own trading, then why do you feel that way? You should make immediate changes that put you in firm control of your own trading destiny.
10. Not getting a bigger-picture perspective on a market. One can look at a daily bar chart and get a shorter-term perspective on a market trend. But a look at the longer-term weekly or monthly chart for that same market can reveal a completely different perspective. It is prudent to examine longer-term charts, for that bigger-picture perspective, when contemplating a trade.
11 Fascinating Market Correlations You'll Want to Use
Experienced futures traders know there are many correlations among futures markets - some of which are valuable guides in helping to determine specific market trends, and some of which are fickle. This educational feature will examine some basic correlations among futures markets, and will likely be most beneficial to the less-experienced traders. However, it just might be a good refresher for the experienced traders who may have forgotten a few of the market correlations.
It is important to emphasize that market correlations are never 100% predictable, and that some market correlations can and do make 180-degree turns over a period of time.
U.S. Dollar-Gold: The gold market and the dollar usually trade in an inverse relationship. This has been the case for many years. During times of U.S. economic prosperity and lower inflation, the dollar will usually benefit as money flows into U.S. paper assets (stocks and bonds), while physical assets (gold) are usually less attractive. Conversely, during times of weaker U.S. economic growth, higher inflation or heightened world economic or political uncertainty, traders and investors will tend to flock out of "paper" assets and into "hard" assets such as gold. Inflation is a bullish phenomenon for gold.
U.S. Dollar-U.S. Treasury Bonds: Usually, a stronger dollar means a stronger bond market because of good demand for U.S. dollars (from overseas investors) to buy U.S. T-Bonds. T-Bonds are also seen as a "flight-to-quality" asset during times of economic or political instability. In the past, the U.S. dollar has also benefited from "flight-to-quality" asset moves. However, since the major terrorist attacks on the U.S. and the resulting damage to the U.S. economy, the safe-haven status of the "greenback" has been much less pronounced.
Crude Oil-U.S. Treasury Bonds: If crude oil prices rally strongly, that is a negative for U.S. T-Bond prices, due to notions that inflationary pressures could reignite and become problematic for the economy. Inflation is the arch enemy of the bond market. Rising crude oil prices are also bullish for the gold market.
CRB-U.S. Treasury Bonds: The CRB Index is a basket of commodities melded into one composite price. A rising CRB index means generally rising commodities prices, and increasing inflation. Thus, a rising CRB Index is negative for U.S. Treasury Bond prices.
U.S. Stock Indexes-U.S. Treasury Bonds: Since the bull market in U.S. stocks ended just over two years ago, stock index futures prices and U.S. Treasury bond futures prices have traded in an inverse relationship. When stock prices are up, bond prices are usually down. However, during the long bull market run that preceded the current bear market, stock and bond prices traded in tandem. In fact, years ago, before all the electronic overnight futures trading had begun, the best way to get a good read on how the stock indexes would open was by early trading in the T-bond market. (T-Bond trading opens 70 minutes before the stock indexes).
Silver-Soybeans: This corollary may be more fiction than fact, at least nowadays. But during the "go-go" days of soaring precious metals and soybean prices, it was said that if soybean futures would lock limit-up, bean traders would buy silver futures.
Cattle-Hogs: The point to mention here is that if strong price gains or losses occur in one meat futures complex, there is likely to be somewhat of a spillover effect in the other meat complex. For example, sharp losses in the cattle or feeder cattle futures will likely weigh on the hogs and pork bellies.
Currency Futures-U.S. Dollar Index: Most major IMM currency futures contracts are "crossed" against the U.S. dollar. Thus, when the majority of the currencies are trading higher, it's very likely that the U.S. Dollar Index will be trading lower. It's a good idea for currency traders to keep a watchful eye on the U.S. Dollar Index, as it's the best barometer for the overall health of the U.S. dollar versus major foreign currencies.
U.S. Stock Indexes-Lumber: Lumber is a very important commodity for the U.S. economy. It is literally a building block for the nation. If the stock market is sharply higher, lumber futures prices will be supported. A big sell off in the stock market will likely find selling pressure on lumber futures.
N.Y. Cocoa-British Pound: London cocoa futures trading is as important (or even more important) than New York cocoa futures trading, on a worldwide basis. London cocoa futures trading is conducted in the British pound currency. Thus, big fluctuations in the pound sterling will impact the price of U.S. cocoa futures, due to the cross-currency fluctuations of the British pound versus the U.S. dollar. Keep in mind there is constantly arbitrage taking place between the New York and London cocoa markets, and thus the currency cross-rates between the pound and the dollar are very important.
Grains-U.S. Dollar Index: A weaker U.S. dollar will be an underlying positive for the U.S. grain futures markets because it makes U.S. grain exports more competitive (cheaper prices) on the world market. Larger-degree trends in the U.S. dollar will have a larger-degree impact on the grains.
It is important to emphasize that market correlations are never 100% predictable, and that some market correlations can and do make 180-degree turns over a period of time.
U.S. Dollar-Gold: The gold market and the dollar usually trade in an inverse relationship. This has been the case for many years. During times of U.S. economic prosperity and lower inflation, the dollar will usually benefit as money flows into U.S. paper assets (stocks and bonds), while physical assets (gold) are usually less attractive. Conversely, during times of weaker U.S. economic growth, higher inflation or heightened world economic or political uncertainty, traders and investors will tend to flock out of "paper" assets and into "hard" assets such as gold. Inflation is a bullish phenomenon for gold.
U.S. Dollar-U.S. Treasury Bonds: Usually, a stronger dollar means a stronger bond market because of good demand for U.S. dollars (from overseas investors) to buy U.S. T-Bonds. T-Bonds are also seen as a "flight-to-quality" asset during times of economic or political instability. In the past, the U.S. dollar has also benefited from "flight-to-quality" asset moves. However, since the major terrorist attacks on the U.S. and the resulting damage to the U.S. economy, the safe-haven status of the "greenback" has been much less pronounced.
Crude Oil-U.S. Treasury Bonds: If crude oil prices rally strongly, that is a negative for U.S. T-Bond prices, due to notions that inflationary pressures could reignite and become problematic for the economy. Inflation is the arch enemy of the bond market. Rising crude oil prices are also bullish for the gold market.
CRB-U.S. Treasury Bonds: The CRB Index is a basket of commodities melded into one composite price. A rising CRB index means generally rising commodities prices, and increasing inflation. Thus, a rising CRB Index is negative for U.S. Treasury Bond prices.
U.S. Stock Indexes-U.S. Treasury Bonds: Since the bull market in U.S. stocks ended just over two years ago, stock index futures prices and U.S. Treasury bond futures prices have traded in an inverse relationship. When stock prices are up, bond prices are usually down. However, during the long bull market run that preceded the current bear market, stock and bond prices traded in tandem. In fact, years ago, before all the electronic overnight futures trading had begun, the best way to get a good read on how the stock indexes would open was by early trading in the T-bond market. (T-Bond trading opens 70 minutes before the stock indexes).
Silver-Soybeans: This corollary may be more fiction than fact, at least nowadays. But during the "go-go" days of soaring precious metals and soybean prices, it was said that if soybean futures would lock limit-up, bean traders would buy silver futures.
Cattle-Hogs: The point to mention here is that if strong price gains or losses occur in one meat futures complex, there is likely to be somewhat of a spillover effect in the other meat complex. For example, sharp losses in the cattle or feeder cattle futures will likely weigh on the hogs and pork bellies.
Currency Futures-U.S. Dollar Index: Most major IMM currency futures contracts are "crossed" against the U.S. dollar. Thus, when the majority of the currencies are trading higher, it's very likely that the U.S. Dollar Index will be trading lower. It's a good idea for currency traders to keep a watchful eye on the U.S. Dollar Index, as it's the best barometer for the overall health of the U.S. dollar versus major foreign currencies.
U.S. Stock Indexes-Lumber: Lumber is a very important commodity for the U.S. economy. It is literally a building block for the nation. If the stock market is sharply higher, lumber futures prices will be supported. A big sell off in the stock market will likely find selling pressure on lumber futures.
N.Y. Cocoa-British Pound: London cocoa futures trading is as important (or even more important) than New York cocoa futures trading, on a worldwide basis. London cocoa futures trading is conducted in the British pound currency. Thus, big fluctuations in the pound sterling will impact the price of U.S. cocoa futures, due to the cross-currency fluctuations of the British pound versus the U.S. dollar. Keep in mind there is constantly arbitrage taking place between the New York and London cocoa markets, and thus the currency cross-rates between the pound and the dollar are very important.
Grains-U.S. Dollar Index: A weaker U.S. dollar will be an underlying positive for the U.S. grain futures markets because it makes U.S. grain exports more competitive (cheaper prices) on the world market. Larger-degree trends in the U.S. dollar will have a larger-degree impact on the grains.
Forex Trading Strategies
Reviews of forex trading systems and strategies: locate the top forex trading systems and find out what criteria separates good forex systems from the poor ones - find a profitable. Trading strategies - sigma forex online forex trading currency sigma forex online broker is a launching pad for people, wishing to use advanced forex trading strategies that lead to profitable trades. Finally: powerful forex trading strategies which work forex.com - the site for forex trading online currency trading w/ real time execution forex mini accounts from $250 free forex charts & quotes forex training registered fcm. Forex forex trading currency trading forex trading strategies for the trader with a medium term time horizon. Forex.com > learn > local events > local workshops > half-day to attend strategies in forex trading free of charge, you must be a forex.com client with a minimum balance of $5000 learn the same strategies used by professional traders around.Forex trading strategies the forex is a world wide market for buying and selling currencies. Forexlivepro com - forex trading strategies, forex systems and forex forex trading strategies that can change your life. Forex trading strategy discover powerful forex trading strategies, tips and secrets. Free verified forex trading strategies course and seminar the best forex signals online b www.forexlivepro.com -we provide real time forex signals, education resources and live trading room for forex trader
Privacy Policy
Privacy Policy for www.aboutforexguide.blogspot.com If you require any more information or have any questions about our privacy policy, please feel free to contact us by email at bishnu.adhikari3[at]gmail (dot) com. At www.aboutforexguide.blogspot.com, the privacy of our visitors is of extreme importance to us. This privacy policy document outlines the types of personal information is received and collected by www.aboutforexguide.blogspot.com and how it is used. Log Files Like many other Web sites, www.aboutforexguide.blogspot.com makes use of log files. The information inside the log files includes internet protocol ( IP ) addresses, type of browser, Internet Service Provider ( ISP ), date/time stamp, referring/exit pages, and number of clicks to analyze trends, administer the site, track user’s movement around the site, and gather demographic information. IP addresses, and other such information are not linked to any information that is personally identifiable. Cookies and Web Beacons www.aboutforexguide.blogspot.com does use cookies to store information about visitors preferences, record user-specific information on which pages the user access or visit, customize Web page content based on visitors browser type or other information that the visitor sends via their browser. DoubleClick DART Cookie .:: Google, as a third party vendor, uses cookies to serve ads on your site. .:: Google's use of the DART cookie enables it to serve ads to your users based on their visit to your sites and other sites on the Internet. .:: Users may opt out of the use of the DART cookie by visiting the Google ad and content network privacy policy at the following URL - http://www.google.com/privacy_ads.html Some of our advertising partners may use cookies and web beacons on our site. Our advertising partners include .... Google Adsense These third-party ad servers or ad networks use technology to the advertisements and links that appear on www.aboutforexguide.blogspot.com send directly to your browsers. They automatically receive your IP address when this occurs. Other technologies ( such as cookies, JavaScript, or Web Beacons ) may also be used by the third-party ad networks to measure the effectiveness of their advertisements and / or to personalize the advertising content that you see. www.aboutforexguide.blogspot.com has no access to or control over these cookies that are used by third-party advertisers. You should consult the respective privacy policies of these third-party ad servers for more detailed information on their practices as well as for instructions about how to opt-out of certain practices. www.aboutforexguide.blogspot.com's privacy policy does not apply to, and we cannot control the activities of, such other advertisers or web sites. If you wish to disable cookies, you may do so through your individual browser options. More detailed information about cookie management with specific web browsers can be found at the browsers' respective websites.
Forex Trading Software - Forex Robots and Expert Advisors, Why You Shouldn't Use Them
The reason you should not trust your money to the Forex trading packages which call themselves Forex robots or Expert Advisors is because they don't make money and the reason is obvious and the subject of this article, Let's see why they lose money.When I look at any Forex Expert Advisor, I always see a track record which is better than the world's best fund managers, has less drawdown and I can buy this life long income for a hundred dollars or so! Of course it looks to good to be true and it is; if you look closely at the track records, you will notice they all have one thing in common:They never produce an audited or verified track record from an independent source; all you get are, paper back tests or figures from the vendors themselves.Why would anyone trust a system which can't produce a verified track record?Well a lot of naïve and greedy do and they all lose money.Any sensible person can see that if these Expert Advisors worked, all the dealing teams in banks would be sacked. The top fund managers and dealers, are on multi million salaries and bonuses and a hundred dollar robot would offer a great saving, over these highly paid teams but have any banks sacked their dealing teams? Of course not.If you want to win at Forex trading understand, you don't make money without making an effort and there is no automatic way to big profits, you have to work for them.If you want to win at Forex trading get yourself an education, learn skills and you will be well rewarded with a great second or life changing income.
How to Invest in a Managed Forex Fund
Quite candidly, making an investment in a managed Forex fund isn't the type of solution that most of us are looking out for when we speak of giant profits in the FX market. What happens when you become a stockholder in a managed Forex fund is that you deposit a specific amount of money inside a brokerage account, which will then be managed only either by two brokers or revolving brokers, relying on the situation. There are some upsides as well as drawbacks when having a look at managed Forex funds. One of the upsides is the easy fact that you do not need to do anything to manipulate your own investments - all the investments are done for you and done on the advice of the boss, so you know you are getting solid investment decisions with your hard earned money. Whilst nothing is absolutely assured, masses of speculators have been going into multiple managed accounts as they are unable or not keen to trade adequately for themselves - or because they have no time to sit out front of the computer, handling the trading platform and system and making investment calls. For one, you aren't in control of your cash and that in itself is a big risk.They may show you all sort of safety precautions and a track record that has lists many years of successfully performance, but there's no such thing as a sure bet - even with managed accounts. You are surrendering the destiny of thousands of dollars to an independent managed Forex fund, who you hope will do a good job at managed your investments. Also, there's an amount of dilution because you are never sure if your account is given the type of attention you need. On the other hand, many managed Forex funds now use PAMM systems to make sure that all of their clients are given precisely the same allocations, which lessens this concern.Another concern is the level of charges charged to your account. You need to also ensure that the main fee that they are making profits from is the performance fee, which you only pay to them if they make you money. You always must remember that managed Forex funds exist as a way to try to profit for themselves from your investment. If things go well, you both earn cash ; if things go bad, only you loss money. Still, for backers looking to make significant returns, that are typically not correlated to the stock exchanges, managed Forex funds are a cool place to invest some of your capital. Just make efforts to pick a good one, and know that any real fund will have its swings and roundabouts, and that if performance seems to good to be true, it doubtless is.
The Real Million Dollar Question - Will These Forex Robots Actually Work?
The amount of money traded in the Forex each day has reached unbelievable levels and as you would expect many companies have entered the fray with products and tools designed to help you and I, traders, make more cash.
Even if today is your first day looking at the Forex market and you're trying to decide whether or not to get involved, I am certain you've seen dozens of ads for automated trading robots.
Forex trading robots as claimed by their creators and marketers, can monitor the Forex market for fluctuations and act automatically to these changes making trades which make their owners lots of money. Many of these companies claim that their robots can make you money automatically even while you sleep or are on vacation.
What makes these automated robots tick? Exactly how is it they know when to buy, when to sell, or just as important, when to simply do nothing? In a nutshell, Forex robots are designed to monitor fluctuations in currency price and then when certain market conditions are met, they automatically, in many cases, make trades. These "market conditions" are set by the robots owner (you or me) based on several factors including aversion to risk or lack thereof.
Moving forward in the process, once a position has been purchased and established, the robot will then sell that position in an attempt to make it's owner as much profit as possible. The selling point, particularly to newer traders is that the robot can be set up to trade on its own and make a profit with very little downside risk.
Can these robots really make money on auto-pilot as advertised?
My quick answer is no. There are so many factors that drive fluctuations in currency prices that even the most intricate Forex robots can't realistically be expected to make the correct decisions concerning profitability 100% of the time.
Having said that, Forex robots can be and are a very valuable trading tool. They can make turning a profit in the Forex market far easier and can make your learning curve a lot shorter. In my opinion and in my experience, a newer trader will find that achieving profitability is far easier with a robot's guidance than if they try to trade without it. These auto-bots should be monitored and have to be set up correctly to ensure that they make profitable decisions the majority of the time. Follow the instructions carefully and read as much as possible regarding set-up parameters before beginning live trading with real money.
Traders should use Forex robots as tools to simplify their decision making but it is the trader who ultimately should make the decision. Forex robots can be very powerful tools when used in this manner. It is usually when beginner traders take the mindset that they can automatically start making you money without any monitoring or safe guards that problems can arise.
A new trader should research their purchase before buying any tool. As with any product in virtually any market, there are some products that are scams and others which are legitimate and work as advertised, so do your homework.
Whatever Forex trading tool you decide to purchase and use, please keep in mind that it is not the tool but how you use it that will determine your profitability.
Currency Trading in the Forex market is one of the hottest topics online today.
Currency Forex Online Trading product reviews and consumer feedback is a great resource for comparing Forex trading platforms and automated robotic software. Compare features and pricing and read actual consumer reviews. Make an informed buying decision.
Even if today is your first day looking at the Forex market and you're trying to decide whether or not to get involved, I am certain you've seen dozens of ads for automated trading robots.
Forex trading robots as claimed by their creators and marketers, can monitor the Forex market for fluctuations and act automatically to these changes making trades which make their owners lots of money. Many of these companies claim that their robots can make you money automatically even while you sleep or are on vacation.
What makes these automated robots tick? Exactly how is it they know when to buy, when to sell, or just as important, when to simply do nothing? In a nutshell, Forex robots are designed to monitor fluctuations in currency price and then when certain market conditions are met, they automatically, in many cases, make trades. These "market conditions" are set by the robots owner (you or me) based on several factors including aversion to risk or lack thereof.
Moving forward in the process, once a position has been purchased and established, the robot will then sell that position in an attempt to make it's owner as much profit as possible. The selling point, particularly to newer traders is that the robot can be set up to trade on its own and make a profit with very little downside risk.
Can these robots really make money on auto-pilot as advertised?
My quick answer is no. There are so many factors that drive fluctuations in currency prices that even the most intricate Forex robots can't realistically be expected to make the correct decisions concerning profitability 100% of the time.
Having said that, Forex robots can be and are a very valuable trading tool. They can make turning a profit in the Forex market far easier and can make your learning curve a lot shorter. In my opinion and in my experience, a newer trader will find that achieving profitability is far easier with a robot's guidance than if they try to trade without it. These auto-bots should be monitored and have to be set up correctly to ensure that they make profitable decisions the majority of the time. Follow the instructions carefully and read as much as possible regarding set-up parameters before beginning live trading with real money.
Traders should use Forex robots as tools to simplify their decision making but it is the trader who ultimately should make the decision. Forex robots can be very powerful tools when used in this manner. It is usually when beginner traders take the mindset that they can automatically start making you money without any monitoring or safe guards that problems can arise.
A new trader should research their purchase before buying any tool. As with any product in virtually any market, there are some products that are scams and others which are legitimate and work as advertised, so do your homework.
Whatever Forex trading tool you decide to purchase and use, please keep in mind that it is not the tool but how you use it that will determine your profitability.
Currency Trading in the Forex market is one of the hottest topics online today.
Currency Forex Online Trading product reviews and consumer feedback is a great resource for comparing Forex trading platforms and automated robotic software. Compare features and pricing and read actual consumer reviews. Make an informed buying decision.
Foreign exchange market
The foreign exchange market (Currency, Forex, or FX) market is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. [1]FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system till 1971.
Today, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]
The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such currencies.
Today, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]
The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such currencies.
What is Forex Trading????????
The investor's goal in Forex trading is to profit from foreign currency movements. Forex trading or currency trading is always done in currency pairs. For example, the exchange rate of EUR/USD on Aug 26th, 2003 was 1.0857. This number is also referred to as a "Forex rate" or just "rate" for short. If the investor had bought 1000 euros on that date, he would have paid 1085.70 U.S. dollars. One year later, the Forex rate was 1.2083, which means that the value of the euro (the numerator of the EUR/USD ratio) increased in relation to the U.S. dollar. The investor could now sell the 1000 euros in order to receive 1208.30 dollars. Therefore, the investor would have USD 122.60 more than what he had started one year earlier. However, to know if the investor made a good investment, one needs to compare this investment option to alternative investments. At the very minimum, the return on investment (ROI) should be compared to the return on a "risk-free" investment. One example of a risk-free investment is long-term U.S. government bonds since there is practically no chance for a default, i.e. the U.S. government going bankrupt or being unable or unwilling to pay its debt obligation.
When trading currencies, trade only when you expect the currency you are buying to increase in value relative to the currency you are selling. If the currency you are buying does increase in value, you must sell back the other currency in order to lock in a profit. An open trade (also called an open position) is a trade in which a trader has bought or sold a particular currency pair and has not yet sold or bought back the equivalent amount to close the position.
However, it is estimated that anywhere from 70%-90% of the FX market is speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency.
When trading currencies, trade only when you expect the currency you are buying to increase in value relative to the currency you are selling. If the currency you are buying does increase in value, you must sell back the other currency in order to lock in a profit. An open trade (also called an open position) is a trade in which a trader has bought or sold a particular currency pair and has not yet sold or bought back the equivalent amount to close the position.
However, it is estimated that anywhere from 70%-90% of the FX market is speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency.
Difference Between Forex and Stock
1. The Forex market has a lot of advantages compare to stock market: A Forex trader could make profit through the market no matter if it is bearish and bullish which is different from the capital market, Forex has no strict regulation in speculation, no matter whether it is a long-term or a short-term transaction there is still a hidden profit, moreover, Forex market is a double-transaction market which means Forex traders could make profit through both upward and downward trend.
2. Forex traders could obtain a much larger transaction compared to the stock market, through the Forex trading, Forex traders could obtain 100 times larger transaction compared to the stock market. According to the present US situation, if a Forex trader invests $1,000 in the stock market, the trader may obtain $2,000 of stock domination property with a proportion of 2:1, but through Forex trading, a Forex trader can do transaction with a proportion up to 100:1.Forex trader may make profit from the ordinary news, like the interest rate change, Forex market is closely related to various countries' politic, economy and culture, Forex traders could also obtain profit from other kinds of news, for example interest rate level change, will influence the interest of the Forex deposit.
3. Forex traders could do 24 hours trading. The stock market can only be traded during daytime at a specific time, generally from 9:30a.m. to 4:00p.m.. If you too have your own full time job, then you will face the dilemma - either to give up your full time job or forgo the trading opportunity. But Forex market can be traded 5 days a week and 24 hours a day, Forex traders can trade during their free time which is normally at night after working hour.
4. If a trader analyze based on technical analysis, Forex trading would be much more suitable for such traders because the Forex market has a very large trading volume. Currently the Forex market has daily trading volume of 190 billion Dollar, such giant market will completely digest a fore trader's transaction cash, under such situation the accuracy of the technical analysis would be much higher then any financial market, the chances of using technical analysis to make profit would be much more higher.
5. In the stock market there are hundred and thousand kinds of stocks, then choosing stock will be a very difficult matter. But in the Forex market, the currency combination is extremely limited, this may enable Forex traders to concentrate on these currencies combination,
2. Forex traders could obtain a much larger transaction compared to the stock market, through the Forex trading, Forex traders could obtain 100 times larger transaction compared to the stock market. According to the present US situation, if a Forex trader invests $1,000 in the stock market, the trader may obtain $2,000 of stock domination property with a proportion of 2:1, but through Forex trading, a Forex trader can do transaction with a proportion up to 100:1.Forex trader may make profit from the ordinary news, like the interest rate change, Forex market is closely related to various countries' politic, economy and culture, Forex traders could also obtain profit from other kinds of news, for example interest rate level change, will influence the interest of the Forex deposit.
3. Forex traders could do 24 hours trading. The stock market can only be traded during daytime at a specific time, generally from 9:30a.m. to 4:00p.m.. If you too have your own full time job, then you will face the dilemma - either to give up your full time job or forgo the trading opportunity. But Forex market can be traded 5 days a week and 24 hours a day, Forex traders can trade during their free time which is normally at night after working hour.
4. If a trader analyze based on technical analysis, Forex trading would be much more suitable for such traders because the Forex market has a very large trading volume. Currently the Forex market has daily trading volume of 190 billion Dollar, such giant market will completely digest a fore trader's transaction cash, under such situation the accuracy of the technical analysis would be much higher then any financial market, the chances of using technical analysis to make profit would be much more higher.
5. In the stock market there are hundred and thousand kinds of stocks, then choosing stock will be a very difficult matter. But in the Forex market, the currency combination is extremely limited, this may enable Forex traders to concentrate on these currencies combination,
The Difference Forex and Futures
1. A Forex trader could trade more transaction compared to the futures market (the trading volume could be a times larger), and the risk will be strictly under control. The trading volume of the Forex market is 46 times larger compared to the futures market, moreover Forex traders could make more profit from the Forex market due to the larger trading volume (the transaction volume is a few times larger), the REFCO Switzerland rich transaction platform allowed transaction between 1-100 times to be carry on, moreover a Forex trader could decide his or her own transaction amount, for example: Your account has $30,000, the basic transaction unit is each $1,000 (which transaction amount in $1.00, million), namely, so the proportion of the margin of each transaction unit is 100:1.
2. The risk of the Forex trader is under control, such margin call will not happen compared to futures, through the Forex trading system, your risk will receive the strict limit, even if your margin if lower then the deposit required, the Forex trading system will automatically settle your position, this means even if a Forex trader suffered losses, moreover if the market is suffering from a disaster fluctuation, your loss could not surpass your account amount. In order to understand the advantages, please apply for the demo account to carry on the complete zero risk.
3. A Forex trader will receive a large limitation of liquidation and a relatively fair market because the trading volume of the Forex market is large and it is also the largest liquidation market in the world. At present the trading volume in the Forex market is 140 billion Dollars, such big market will completely digest your transaction cash.
4. A Forex trader may do 24 hours transactions and other markets are different, the Forex market is a 24 hour linkages market, it starts from every Sunday before dawn Australian Sydney market, substandard collect the transaction center Singapore, Tokyo, London, Frankfurt to New York continuously to open, such linkage market enable you to do 24 hours transactions, also provide flexibility for Forex trader to do transaction.
2. The risk of the Forex trader is under control, such margin call will not happen compared to futures, through the Forex trading system, your risk will receive the strict limit, even if your margin if lower then the deposit required, the Forex trading system will automatically settle your position, this means even if a Forex trader suffered losses, moreover if the market is suffering from a disaster fluctuation, your loss could not surpass your account amount. In order to understand the advantages, please apply for the demo account to carry on the complete zero risk.
3. A Forex trader will receive a large limitation of liquidation and a relatively fair market because the trading volume of the Forex market is large and it is also the largest liquidation market in the world. At present the trading volume in the Forex market is 140 billion Dollars, such big market will completely digest your transaction cash.
4. A Forex trader may do 24 hours transactions and other markets are different, the Forex market is a 24 hour linkages market, it starts from every Sunday before dawn Australian Sydney market, substandard collect the transaction center Singapore, Tokyo, London, Frankfurt to New York continuously to open, such linkage market enable you to do 24 hours transactions, also provide flexibility for Forex trader to do transaction.
Forex Home Business
The more you understand about any subject, the more interesting it becomes. As you read this article you’ll find that the subject of forex home business is certainly no exception.
When running a forex home business, a person quickly gains knowledge of how the business world works. Whether it be selling crafts, doing a home delivery business, or selling real-estate, after investing a lot of time and effort into a home or small business, a person quickly becomes aware of the few basic business truths that govern business.
One of those truths is that you have to have time and money to start a small business or any business for that matter. More often than not, the people that have the time dont have the money to invest in a home-based business and the people that have the money dont have the time. With Forex home business, it is quite possible to generate an income with a small time investment per day, after studying FOREX for a few months, and a very small investment as little as $50 in some cases.
The second truth, and these are probably quite obvious to most people, is that in order to make money a business has to have some sort of product to sell or perform some type of service. In the FOREX world, nothing is being sold and no service is being performed, but rather money is being exchanged. You are making a profit based on the actual exchange value of one currency against another currency. This eliminates the need for employees, such as customer service personnel and human resource people if your company were to become that big.
Is everything making sense so far? If not, I’m sure that with just a little more reading, all the facts will fall into place.
Also, because of the huge size of the FOREX market, trading nearly $1.5 trillion dollars a day, such things as social events, bad publicity, and changes in political climate will have no effect on your business. In fact, after studying FOREX, you will be able to see how these things will actually benefit your FOREX home business.
The third and last classical business truth is that most people are prevented from starting a home-based business because they dont feel good enough about themselves. They dont feel like theyre educated enough. I read stories all of the time about people that feel passionate about something or they just pick something that they are relatively good at or have done before and start a business. They just take a chance. If you want to do it, step out. Take that first step. Dont drop any huge sums of money, of course, but do a little research, make a small investment and start your adventure down to the road to FOREX trading.
You dont need a doctorite degree to get involved with FOREX trading, but after a couple of months of good study, its quite possible to generate a significant source of cash from FOREX trading. Forex traders study the political and economic trends in the economically important countries, including USA, Japan, England or the European Union, and make an assessment of the present or future purchase values of these currencies in comparison with each other. Again, the process of sale and purchase is like any other market activity, except that the time period varies. Blindly trade. Forex home business is not about gambling. Consider a situation where you think that the price of a given commodity, say, silver, gold, or wheat, will increase in the near future.
You can’t predict when knowing something extra about forex home business will come in handy. If you learned anything new about forex home business in this article, you should file the article where you can find it again.
When running a forex home business, a person quickly gains knowledge of how the business world works. Whether it be selling crafts, doing a home delivery business, or selling real-estate, after investing a lot of time and effort into a home or small business, a person quickly becomes aware of the few basic business truths that govern business.
One of those truths is that you have to have time and money to start a small business or any business for that matter. More often than not, the people that have the time dont have the money to invest in a home-based business and the people that have the money dont have the time. With Forex home business, it is quite possible to generate an income with a small time investment per day, after studying FOREX for a few months, and a very small investment as little as $50 in some cases.
The second truth, and these are probably quite obvious to most people, is that in order to make money a business has to have some sort of product to sell or perform some type of service. In the FOREX world, nothing is being sold and no service is being performed, but rather money is being exchanged. You are making a profit based on the actual exchange value of one currency against another currency. This eliminates the need for employees, such as customer service personnel and human resource people if your company were to become that big.
Is everything making sense so far? If not, I’m sure that with just a little more reading, all the facts will fall into place.
Also, because of the huge size of the FOREX market, trading nearly $1.5 trillion dollars a day, such things as social events, bad publicity, and changes in political climate will have no effect on your business. In fact, after studying FOREX, you will be able to see how these things will actually benefit your FOREX home business.
The third and last classical business truth is that most people are prevented from starting a home-based business because they dont feel good enough about themselves. They dont feel like theyre educated enough. I read stories all of the time about people that feel passionate about something or they just pick something that they are relatively good at or have done before and start a business. They just take a chance. If you want to do it, step out. Take that first step. Dont drop any huge sums of money, of course, but do a little research, make a small investment and start your adventure down to the road to FOREX trading.
You dont need a doctorite degree to get involved with FOREX trading, but after a couple of months of good study, its quite possible to generate a significant source of cash from FOREX trading. Forex traders study the political and economic trends in the economically important countries, including USA, Japan, England or the European Union, and make an assessment of the present or future purchase values of these currencies in comparison with each other. Again, the process of sale and purchase is like any other market activity, except that the time period varies. Blindly trade. Forex home business is not about gambling. Consider a situation where you think that the price of a given commodity, say, silver, gold, or wheat, will increase in the near future.
You can’t predict when knowing something extra about forex home business will come in handy. If you learned anything new about forex home business in this article, you should file the article where you can find it again.
Automated trading platform
An automated trading platform is used both by trading system publishers, and the investors who subscribe to them. Using it, traders can track marked-to-market performance using several different metrics for verifiability.[1] In addition to tracking performance of these "black box" systems, the automated trading platform also provides a venue to permit the system's buy/sell signals to be executed to the subscriber'sbrokerage account automatically. Some of the automated trading platforms are completely broker-agnostic and permit an interface with almost any brokerage firm.
The immediate benefit to investors is that it allows them to have insight into various trading systems that are on offer, which may make claims of profitability. The platform "allows people or institutions that believe they can outperform the market to prove to the public in a verifiable way that they indeed can do so."[2] In the second stage of use, traders subscribe to one or more of these trading methodologies, and have the trades that are specified by the system executed automatically in a brokerage account.
Although turning over decisions and execution to a "black box" system requires the investor to give up an element of control, the automated trading platform does serve the purpose of allowing the trader to spend more time on strategy and on studying trends, rather than executing those strategies manually.
[edit]Speed of execution
The appearance of automated trading systems and stock markets has greatly narrowed the window of opportunity on many trades, sometimes to just a few seconds in duration. In response, traders are turning to automated systems of their own. If for example, one is trading on one of the many systems that hinge on these very small windows, manual execution is virtually impossible. Execution of the trades must be initiated immediately, with split-second accuracy, as soon as the system gives the buy/sell signal.[3]
[edit]Best practicesThe automated trading platform, in providing a venue for analyzing multiple stock trading systems or "black boxes", provides a tool for verifiable analysis of each of those systems. While such systems often make claims of profitability, and sometimes of unheard-of returns, the automated trading platform allows the investors to vet those systems and play the ones most likely to win. Generally accepted best practices are described by Klein as follows:
The immediate benefit to investors is that it allows them to have insight into various trading systems that are on offer, which may make claims of profitability. The platform "allows people or institutions that believe they can outperform the market to prove to the public in a verifiable way that they indeed can do so."[2] In the second stage of use, traders subscribe to one or more of these trading methodologies, and have the trades that are specified by the system executed automatically in a brokerage account.
Although turning over decisions and execution to a "black box" system requires the investor to give up an element of control, the automated trading platform does serve the purpose of allowing the trader to spend more time on strategy and on studying trends, rather than executing those strategies manually.
[edit]Speed of execution
The appearance of automated trading systems and stock markets has greatly narrowed the window of opportunity on many trades, sometimes to just a few seconds in duration. In response, traders are turning to automated systems of their own. If for example, one is trading on one of the many systems that hinge on these very small windows, manual execution is virtually impossible. Execution of the trades must be initiated immediately, with split-second accuracy, as soon as the system gives the buy/sell signal.[3]
[edit]Best practicesThe automated trading platform, in providing a venue for analyzing multiple stock trading systems or "black boxes", provides a tool for verifiable analysis of each of those systems. While such systems often make claims of profitability, and sometimes of unheard-of returns, the automated trading platform allows the investors to vet those systems and play the ones most likely to win. Generally accepted best practices are described by Klein as follows:
Retail forex
In financial markets, the retail forex (retail off-exchange currency trading or retail FX) market is a subset of the larger foreign exchange market. This "market has long been plagued by swindlers preying on the gullible," according to The New York Times[1]. Whilst there may be a number of fully regulated, reputable international companies that provide a highly transparent and honest service, it's commonly thought that about 90% of all retail FX traders lose money. [2] [3]
It is now possible to trade cash FX, or forex (short for Foreign Exchange (FX)) or currencies around the clock with hundreds of foreign exchange brokers through trading platforms. The reason that the business is so profitable is because in many cases brokers are taking the opposite side of the trade, and therefore turning client capital directly into broker profit as the average account loses money. Some brokers provide a matching service, charging a commission instead of taking the opposite site of the trade and "netting the spread", as it is referred to within the forex "industry."
Recently forex brokers have become increasingly regulated. Minimum capital requirements of US$20m now apply in the US, as well as stringent requirements now in Germany and the United Kingdom. Switzlerand now requires forex brokers to become a bank before conducting fx brokerage business from Switzerland.[citation needed]
Algorythmic or machine based formula trading has become increasingly popular in the FX market,with a number of popular packages allowing the customer to program his own studies.
The most traded of the "major" currencies is the pair known as the EUR/USD, due to its size, median volatility and relatively low "spread", referring to the difference between the bid and the ask price. This is usually measured in "pips", normally 1/100 of a full point.[citation needed]
According to the October 2008 issue of e-Forex Magazine, the retail FX market is seeing continued explosive growth despite, and perhaps because of, losses in other markets like global equities in 2008.
Key Concepts Behind a Retail Forex Trade
[edit]Currency Pairs
Currency prices can only fluctuate relative to another currency, so they are traded in pairs. Two of the most common currency pairs are the EUR/USD (the price of US dollars quoted in euros) and the GBP/USD (the price of US dollars quoted in British pounds).
[edit]High Leverage
The idea of margin (leverage) and floating loss is another important trading concept and is perhaps best understood using an example. Most retail Forex market makers permit 100:1 leverage, but also, crucially, require you to have a certain amount of money in your account to protect against a critical loss point. For example, if a $100,000 position is held in EUR/USD on 100:1 leverage, the trader has to put up $1,000 to control the position. However, in the event of a declining value of your positions, Forex market makers, mindful of the fast nature of forex price swings and the amplifying effect of leverage, typically do not allow their traders to go negative and make up the difference at a later date. In order to make sure the trader does not lose more money than is held in the account, forex market makers typically employ automatic systems to close out positions when clients run out of margin (the amount of money in their account not tied to a position). If the trader has $2,000 in his account, and he is buying a $100,000 lot of EUR/USD, he has $1,000 of his $2,000 tied up in margin, with $1,000 left to allow his position to fluctuate downward without being closed out.
Typically a trader's retail forex platform will show him three important numbers associated with his account: his balance, his equity, and his margin remaining. If trader X has two positions: $100,000 long (buy) in EUR/USD, and $100,000 short (sell) in GBP/USD, and he has $10,000 in his account, his positions would look as follows: Because of the 100:1 leverage, it took him $1,000 to control each position. This means that he has used up $2,000 in his margin, out of a $10,000 account, and thus he has $8,000 of margin still available. With this margin, he can either take more positions or keep the margin relatively high to allow his current positions to be maintained in the event of downturns. If the client chooses to open a new position of $100,000, this will again take another $1,000 of his margin, leaving $7,000. He will have used up $3,000 inmargin among the three positions. The other way margin will decrease is if the positions he currently has open lose money. If one of his 3 positions of $100,000 decrease by $5,000 in value (which is fairly common), he now has, of his original $7,000 in margin, only $2,000 left.[original research?]
If you have a $10,000 account and only open one $100,000 position, this has committed only $1,000 of your money plus you must maintain $1,000 in margin. While this leaves $9,000 free in your account, it is possible to lose almost all of it if the speculation loses money.[original research?]
[edit]Transaction Costs and Market Makers
Market makers are compensated for allowing clients to enter the market. They take part or all of the spread in all currency pairs traded. In a common example, EUR/USD, the spread is typically 3 pips (percentage in point) or 3/100 of a cent in this example. Thus prices are quoted with both bid and offer prices (e.g., Buy EUR/USD 1.4900, Sell EUR/USD 1.4903).[citation needed]
That difference of 3 pips is the spread and can amount to a significant amount of money. Because the typical standard lot is 100,000 units of the base currency, those 3 pips on EUR/USD translate to $30 paid by the client to the market maker. However, a pip is not always $10. A pip is 1/100th of a cent (or whatever), and the currency pairs are always purchased by buying 100,000 of the base currency.
For the pair EUR/USD, the quote currency is USD; thus, 1/100th of a cent on a pair with USD as the quote currency will always have a pip of $10. If, on the other hand, your currency pair has Swiss francs (CHF) as a quote instead of USD, then 1/100th of a cent is now worth around $9, because you are buying 100,000 of whatever in Swiss francs.
[edit]Financial Instruments
There are several types of financial instruments commonly used.
Forwards
One way to deal with the Forex risk is to engage in a forward transaction. In this transaction, money does not actually change hands until some agreed upon future date. A buyer and seller agree on an exchange rate for any date in the future, and the transaction occurs on that date, regardless of what the market rates are then. The duration of the trade can be a few days, months or years.
Futures
Foreign currency futures are forward transactions with standard contract sizes and maturity dates — for example, 500,000 British pounds for next November at an agreed rate. Futures are standardized and are usually traded on an exchange created for this purpose. The average contract length is roughly 3 months. Futures contracts are usually inclusive of any interest amounts.
Swaps
The most common type of forward transaction is the currency swap. In a swap, two parties exchange currencies for a certain length of time and agree to reverse the transaction at a later date. These are not contracts and are not traded through an exchange.
Spot
A spot transaction is a two-day delivery transaction for most currency pairs (but one-day for USD/CAD and some others), as opposed to the futures contracts, which are usually three months. This trade represents a “direct exchange” between two currencies, has the shortest time frame, involves cash rather than a contract; and interest is not included in the agreed-upon transaction. The data for this study come from the Spot market.
It is now possible to trade cash FX, or forex (short for Foreign Exchange (FX)) or currencies around the clock with hundreds of foreign exchange brokers through trading platforms. The reason that the business is so profitable is because in many cases brokers are taking the opposite side of the trade, and therefore turning client capital directly into broker profit as the average account loses money. Some brokers provide a matching service, charging a commission instead of taking the opposite site of the trade and "netting the spread", as it is referred to within the forex "industry."
Recently forex brokers have become increasingly regulated. Minimum capital requirements of US$20m now apply in the US, as well as stringent requirements now in Germany and the United Kingdom. Switzlerand now requires forex brokers to become a bank before conducting fx brokerage business from Switzerland.[citation needed]
Algorythmic or machine based formula trading has become increasingly popular in the FX market,with a number of popular packages allowing the customer to program his own studies.
The most traded of the "major" currencies is the pair known as the EUR/USD, due to its size, median volatility and relatively low "spread", referring to the difference between the bid and the ask price. This is usually measured in "pips", normally 1/100 of a full point.[citation needed]
According to the October 2008 issue of e-Forex Magazine, the retail FX market is seeing continued explosive growth despite, and perhaps because of, losses in other markets like global equities in 2008.
Key Concepts Behind a Retail Forex Trade
[edit]Currency Pairs
Currency prices can only fluctuate relative to another currency, so they are traded in pairs. Two of the most common currency pairs are the EUR/USD (the price of US dollars quoted in euros) and the GBP/USD (the price of US dollars quoted in British pounds).
[edit]High Leverage
The idea of margin (leverage) and floating loss is another important trading concept and is perhaps best understood using an example. Most retail Forex market makers permit 100:1 leverage, but also, crucially, require you to have a certain amount of money in your account to protect against a critical loss point. For example, if a $100,000 position is held in EUR/USD on 100:1 leverage, the trader has to put up $1,000 to control the position. However, in the event of a declining value of your positions, Forex market makers, mindful of the fast nature of forex price swings and the amplifying effect of leverage, typically do not allow their traders to go negative and make up the difference at a later date. In order to make sure the trader does not lose more money than is held in the account, forex market makers typically employ automatic systems to close out positions when clients run out of margin (the amount of money in their account not tied to a position). If the trader has $2,000 in his account, and he is buying a $100,000 lot of EUR/USD, he has $1,000 of his $2,000 tied up in margin, with $1,000 left to allow his position to fluctuate downward without being closed out.
Typically a trader's retail forex platform will show him three important numbers associated with his account: his balance, his equity, and his margin remaining. If trader X has two positions: $100,000 long (buy) in EUR/USD, and $100,000 short (sell) in GBP/USD, and he has $10,000 in his account, his positions would look as follows: Because of the 100:1 leverage, it took him $1,000 to control each position. This means that he has used up $2,000 in his margin, out of a $10,000 account, and thus he has $8,000 of margin still available. With this margin, he can either take more positions or keep the margin relatively high to allow his current positions to be maintained in the event of downturns. If the client chooses to open a new position of $100,000, this will again take another $1,000 of his margin, leaving $7,000. He will have used up $3,000 inmargin among the three positions. The other way margin will decrease is if the positions he currently has open lose money. If one of his 3 positions of $100,000 decrease by $5,000 in value (which is fairly common), he now has, of his original $7,000 in margin, only $2,000 left.[original research?]
If you have a $10,000 account and only open one $100,000 position, this has committed only $1,000 of your money plus you must maintain $1,000 in margin. While this leaves $9,000 free in your account, it is possible to lose almost all of it if the speculation loses money.[original research?]
[edit]Transaction Costs and Market Makers
Market makers are compensated for allowing clients to enter the market. They take part or all of the spread in all currency pairs traded. In a common example, EUR/USD, the spread is typically 3 pips (percentage in point) or 3/100 of a cent in this example. Thus prices are quoted with both bid and offer prices (e.g., Buy EUR/USD 1.4900, Sell EUR/USD 1.4903).[citation needed]
That difference of 3 pips is the spread and can amount to a significant amount of money. Because the typical standard lot is 100,000 units of the base currency, those 3 pips on EUR/USD translate to $30 paid by the client to the market maker. However, a pip is not always $10. A pip is 1/100th of a cent (or whatever), and the currency pairs are always purchased by buying 100,000 of the base currency.
For the pair EUR/USD, the quote currency is USD; thus, 1/100th of a cent on a pair with USD as the quote currency will always have a pip of $10. If, on the other hand, your currency pair has Swiss francs (CHF) as a quote instead of USD, then 1/100th of a cent is now worth around $9, because you are buying 100,000 of whatever in Swiss francs.
[edit]Financial Instruments
There are several types of financial instruments commonly used.
Forwards
One way to deal with the Forex risk is to engage in a forward transaction. In this transaction, money does not actually change hands until some agreed upon future date. A buyer and seller agree on an exchange rate for any date in the future, and the transaction occurs on that date, regardless of what the market rates are then. The duration of the trade can be a few days, months or years.
Futures
Foreign currency futures are forward transactions with standard contract sizes and maturity dates — for example, 500,000 British pounds for next November at an agreed rate. Futures are standardized and are usually traded on an exchange created for this purpose. The average contract length is roughly 3 months. Futures contracts are usually inclusive of any interest amounts.
Swaps
The most common type of forward transaction is the currency swap. In a swap, two parties exchange currencies for a certain length of time and agree to reverse the transaction at a later date. These are not contracts and are not traded through an exchange.
Spot
A spot transaction is a two-day delivery transaction for most currency pairs (but one-day for USD/CAD and some others), as opposed to the futures contracts, which are usually three months. This trade represents a “direct exchange” between two currencies, has the shortest time frame, involves cash rather than a contract; and interest is not included in the agreed-upon transaction. The data for this study come from the Spot market.
Iceland Stock Exchange
Iceland Stock Exchange (Icelandic: Kauphöll Íslands) or ICEX was established in 1985 as a joint venture of several banks and brokerage firms on the initiative of the central bank. Trading began in 1986 in Icelandic government bonds, and trading in equities began in 1990. Equities trading increased rapidly thereafter. A wide variety of firms are currently listed on the exchange, including firms in retail, fishing, transportation, banks, insurance and numerous other areas. Because of the small size of the Icelandic economy and the low cost of public listing, many of the companies traded on the ICEX are relatively small and are relatively illiquid.
All domestic trading of Icelandic bonds, equities and mutual funds takes place on the ICEX. Bonds and equities are regularly traded, though the liquidity is small in comparison with other exchanges. No mutual funds are currently listed on the market. Since its founding, the ICEX has used various electronic systems. Since 2000, it has used the SAXESS system of theNOREX alliance, which allows for the cross-listing of stocks on Nordic stock exchanges. No foreign company lists directly on the ICEX, as the small size and illiquidity of the market makes such a move redundant. Conversely, few Icelandic firms have listed abroad, including DeCODE.Faroese bonds were listed on behalf of Virðisbrævamarknaður Føroya in November 2003, and since December 2007 four Faroese equities have been listed on the OMX Nordic Exchange in Iceland.
Since 1 January 1999, the ICEX has operated as a private company, owned by the listed companies (29%), member firms (29%), the Central Bank of Iceland (16%), pension funds (13%) and the Association of Small Investors (13%).
Þórður Friðjónsson is the current president of ICEX (February 2006). ICEX agreed to be taken over by larger rival OMX Nordic Exchange on 19 September 2006. [1]
On 6 October 2008, the Icelandic Financial Supervisory Authority decided to temporarily suspend trading on regulated market financial instruments issued by Glitnir, Kaupthing Bank, Landsbanki, Straumur Investment Bank, Spron and Exista.[2] When the exchange reopened on 14 October, the stock index fell by 76% [3].
All domestic trading of Icelandic bonds, equities and mutual funds takes place on the ICEX. Bonds and equities are regularly traded, though the liquidity is small in comparison with other exchanges. No mutual funds are currently listed on the market. Since its founding, the ICEX has used various electronic systems. Since 2000, it has used the SAXESS system of theNOREX alliance, which allows for the cross-listing of stocks on Nordic stock exchanges. No foreign company lists directly on the ICEX, as the small size and illiquidity of the market makes such a move redundant. Conversely, few Icelandic firms have listed abroad, including DeCODE.Faroese bonds were listed on behalf of Virðisbrævamarknaður Føroya in November 2003, and since December 2007 four Faroese equities have been listed on the OMX Nordic Exchange in Iceland.
Since 1 January 1999, the ICEX has operated as a private company, owned by the listed companies (29%), member firms (29%), the Central Bank of Iceland (16%), pension funds (13%) and the Association of Small Investors (13%).
Þórður Friðjónsson is the current president of ICEX (February 2006). ICEX agreed to be taken over by larger rival OMX Nordic Exchange on 19 September 2006. [1]
On 6 October 2008, the Icelandic Financial Supervisory Authority decided to temporarily suspend trading on regulated market financial instruments issued by Glitnir, Kaupthing Bank, Landsbanki, Straumur Investment Bank, Spron and Exista.[2] When the exchange reopened on 14 October, the stock index fell by 76% [3].
Delhi Stock Exchange Association
The Delhi stock Exchange Association Limited (DSE) is located in New Delhi, India. It was incorporated on June 25, 1947. The exchange is an amalgamation of Delhi Stock and Share Brokers' Association Limited and the Delhi Stocks and Shares Exchange Limited. It is India's fifth exchange. The exchange is one of the premier Stock Exchange in India. The Delhi Stock Exchange is well connected to 50 cities with terminals in North India.
The exchange has over 3,000 listed companies. It has received the market regulator's permission from BSE and has become a member. Now it facilitates the DSE members to trade on the BSE terminals. The exchange is also considered the same from NSE.
DSE Dematerialised Trading
Delhi Stock Exchange has paired up with the National Security Depository Limited (NSDL), and commenced trading in dematerialised shares. This started September, 1988. However, the option for delivering shares either in physical or demat form started in November 1998.
[edit]DSE Trade Guarantee Fund
DSE initialised its Rs.125 crore Trade Guarantee Fund on July 27, 1998. TGF guarantees all the transactions of the DSE interse through theStock Exchange. If a member fails to honour the settlement commitment, TGF undertakes to fulfill the commitment and complete all the settlement without disruption.
The exchange has over 3,000 listed companies. It has received the market regulator's permission from BSE and has become a member. Now it facilitates the DSE members to trade on the BSE terminals. The exchange is also considered the same from NSE.
DSE Dematerialised Trading
Delhi Stock Exchange has paired up with the National Security Depository Limited (NSDL), and commenced trading in dematerialised shares. This started September, 1988. However, the option for delivering shares either in physical or demat form started in November 1998.
[edit]DSE Trade Guarantee Fund
DSE initialised its Rs.125 crore Trade Guarantee Fund on July 27, 1998. TGF guarantees all the transactions of the DSE interse through theStock Exchange. If a member fails to honour the settlement commitment, TGF undertakes to fulfill the commitment and complete all the settlement without disruption.
Budapest Stock Exchange
The Budapest Stock Exchange (BSE) was re-opened in 1990[1] with headquarters inBudapest, Hungary.
BSE is the key institution of the Hungarian Financial market and the official trading venue for publicly offered securities.
The exchange has pre-market sessions from 08:30am to 09:00am and normal trading sessions from 09:00am to 04:30pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance.[2]
About the Exchange
The Budapest Stock Exchange Ltd. (BSE) aims to ensure a transparent and liquid market for its listed securities issued either in Hungary or abroad. As the key institution of the domestic financial market, the stock exchange provides various economic entities with an opportunity to raise capital in an open market and offers investors effective investment opportunities. Through the concentration of supply and demand, it is the most important institution of price discovery.
The stock exchange actively participates in promoting the continuous improvement of the financial culture of domestic companies and investors.
The four main activities of the stock exchange:
Listing services: The BSE allows economic entities to acquire the financial resources required for their expansion in a cost-effective way. In addition, the BSE provides access to the dynamically growing assets of domestic institutional investors and to domestic investor savings. The exchange also provides investors with the simplest access to the global investor community.
Trading services: The BSE acts as the main platform to trade financial instruments. Currently, over 40 domestic and foreign broker companies take part in the exchange trading.
Dissemination of market information: The Exchange supplies real-time and accurate trading data of its listed securities and provides news services on issuers and section members. Through the exchange’s extensive data vendor network, both institutional and individual investors can access market data in a timely and efficient manner.
Product development: The BSE provides a trading opportunity for financial innovations, and offers a wide and constantly growing product range for investors on the futures and option markets. Index futures and options are calculated directly by the exchange. Investors seeking hedging opportunities or gearing can select from a wide array of individual stocks and currency, interest rate and commodity derivatives.
The Exchange’s main goal is to become the financial centre and primary trading venue of Hungarian securities, and to successfully take part in the competition for issuers. This is achieved by a client-oriented operation, a commitment to continuously improve its services and an application of timely and effective technological improvements and solutions.
[edit]History
[edit]Brief history of the Exchange
The Hungarian Stock Exchange, the ancestor of today’s Budapest Stock Exchange (BSE) started its operation on 18 January 1864 in Pest. Although the institution was set up as a stock exchange, four years after its inception it acquired the Grain Hall, the centre of grain trade, becoming the newly created Budapest Stock and Commodity Exchange (BSCE). Following 1889 the stock prices of companies listed on the Budapest Stock Exchange were also published in Vienna, Frankfurt, London and Paris, attesting to the international importance of the BSE. From the1890s Hungarian government bonds were regularly traded on the stock exchanges of London, Paris, Amsterdam and Berlin.
Following World War II, after the nationalisation of the majority of private Hungarian firms, the government officially dissolved the Budapest Stock and Commodity Exchange, and the exchange’s assets became state property.
After the re-establishment, on 21 June, 1990, the BSE re-opened its doors with 41 founding members and one single equity, IBUSZ, the Budapest Stock Exchange.
The open-outcry system of the physical trading floor that characterized the spot market functioned with partial electronic support until 1995. From 1995 until November, 1998 securities trading took place concurrently on the trading floor and in a remote trading system, when the new MultiMarket Trading System (MMTS), based entirely on remote trading was launched. The traditional “battlefield rumble” of the physical trading floor ceased within a year by September 1999, at which time physical trading was entirely replaced by the electronic remote trading platform of the derivatives market.
In April, 2000, after twelve years of operations as an independent legal person, the new BSE Council decided to convert to a business association in order to maintain and strengthen its competitive position.
The year 2004 brought some decisive events in the life of the Exchange. A major restructuring took place in the ownership structure of the BSE, involving the purchase of a majority stake in the Exchange by strong Austrian banks, together with Wiener Börse and Österreichische Kontrollbank AG.
Due to the integration of the activities of the Budapest Stock Exchange and of the Budapest Commodity Exchange, as of 2 November 2005, commodity trading also started on the BSE.
[edit]1864-1914: An Exchange is born
The Hungarian Stock Exchange, the ancestor of today’s Budapest Stock Exchange (BSE) started its operation on 18 January 1864 in Pest on the banks of the Danube (in a building of the Lloyd Insurance Company). The committee in charge of setting up the exchange was led by Frigyes Kochmeister, who was also elected as the first chairman of the exchange (1864-1900). Although the institution was set up as a stock exchange, four years after its inception it acquired the Grain Hall, the centre of grain trade, becoming the newly created Budapest Stock and Commodity Exchange (BSCE). It operated under this name for 80 years as one of the leading stock exchanges in Europe. When the exchange was launched in 1864, there were 17 equities, one debenture, 11 foreign currencies and 9 bills of exchange listed. After a few years of slow growth, 1872 saw the first significant market boom, when the Minister of Trade approved the articles of incorporation of 15 industrial and 550 financial companies whose shares were then listed on the exchange.
The BSCE moved into a new building in 1873 and until 1905 continued its operations in a building on the corner of Wurm Street (now Szende Pál Street) and Maria Theresia Street (now Apáczai Csere János Street). In 1905 it relocated to the Exchange Palace on Szabadság square (now TV Headquarters) until shortly after WWII in 1948.
The first real market crash of the exchange occurred in May, 1873. It took over a decade and a half following the crash before domestic investors regained confidence to invest in the stock market again.
The early 1890s marked another period of spectacular market boom in the exchange’s history, partially fuelled by a general investment optimism that was characteristic of the Millennium years, and by recent trends in the international stock markets. Following 1889 the stock prices of companies listed on the Budapest Stock Exchange were also published in Vienna, Frankfurt, London and Paris, attesting to the international importance of the BSE. From the 1890s, Hungarian government bonds were regularly traded on the stock exchanges of London, Paris, Amsterdam and Berlin. A new invention, the telephone, was the main source of communication during these years.
By the turn of the century, there were already 310 securities traded on the exchange; by the beginning of World War I, this increased to almost 500. The annual turnover in 1913 reached one million shares and the turnover of the Budapest Giro and Mutual Society amounted to 2.7 billion Crowns (the ancestor of the Forint). At the same time there was also a dynamic expansion in grain trading with almost 400,000 tons in 1875, growing to one million tons by the turn of the century and close to one and a half million tons by WWI. As a result of this expansion the BSCE was propelled to become the leading grain exchange in Europe.
[edit]1914-1948: From one world war to another
As in most European countries, the outbreak of World War I brought about the exchange’s closure on 27 July 1914, although trading did not cease. Brokers continued trading during the war and equity prices showed a massive increase starting in 1914. By 1918 over 7.2 million securities had been traded in a year.
The exchange reopened after the war were, the post-war inflationary environment pushed exchange turnover to exceptional highs, tempered only by the introduction in 1925 of the country’s new currency, the pengő. The following four years leading to the market crash of the New York Stock Exchange in October 1929 saw the downturn of the BSCE. On 14 July, 1931, the BSCE was closed down again as a result of a German banking moratorium and a series of financial collapses of the continent’s major banks. Bond trading officially resumed only in 1932, followed by trading in the 18 most traded equities. Following a short period of recovery, the market entered an expansionary phase in 1934, reaching its peak in 1936.
When Hungary entered World War II, the exchange saw a period of unprecedented boom and equity prices in the heavy and military industries increased greatly. In 1942 the government applied stricter measures for the BSCE articles of incorporation, prohibited private trading in equities, required specific reporting obligations on equity portfolios and set maximum values on daily price changes. Despite these restrictions the exchange was able to continue its operations until the start of the city’s siege in mid-December, 1944.
World War II was followed by a period of hyperinflation, characterized by a lively private stock and real exchange trading in currencies and precious metals, conducted partially in the damaged building of the exchange and partially in the neighbouring coffee-houses. The exchange officially re-opened in August, 1946, following the launch of the Forint on August 1. As companies defaulted on their payments of bonds issued previously in the crown and pengő currencies, and since limited companies failed to pay dividends on their stocks due to the war damages they suffered, prices kept falling., Two months after the 1948 nationalisation of the majority of private Hungarian firms, the government officially dissolved the Budapest Stock and Commodity Exchange, and the exchange’s assets became state property.
[edit]From 1990 until today: Rebirth
The first official milestone in the history of the newly created Budapest Stock Exchange was the government’s decision to give green light for the preparation of the Securities Act of 1989. The draft bill was submitted to Parliament in January 1990 and came into force on 1 March. At the same time that the bill came into force on 21 June, 1990, the BSE held its statutory general meeting and the Exchange re-opened its doors. With 41 founding members and one single equity, IBUSZ, the Budapest Stock Exchange was set up as a sui generis organisation (an independent legal entity). The re-establishment of the market economy during the same time and the privatization of businesses played a decisive role in the exchange’s operations. Even though the sale of the larger state-owned businesses often involved the assistance of strategic investors, the BSE played a significant role in the privatisation of many leading Hungarian companies (including IBUSZ, Skála-Coop, MOL, OTP. Matáv (today Hungarian Telecom), Domus, Globus and Richter).
Over the years, there have been major changes in the operating conditions, organisation and function of the BSE. The first trading floor was in the Trade Center on Váci Street, followed by its move in 1992 to the atmospheric old building at 5 Deák Ferenc Street in District V, where it continued its operations for 15 years. In March, 2007 the BSE moved to its current headquarters to the former Herczog Palace at 93 Andrássy Road.
The open-outcry system of the physical trading floor that characterized the spot market functioned with partial electronic support until 1995. From 1995 until November, 1998 securities trading took place concurrently on the trading floor and in a remote trading system, when the new MultiMarket Trading System (MMTS), based entirely on remote trading was launched. The traditional “battlefield rumble” of the physical trading floor ceased within a year by September 1999, at which time physical trading was entirely replaced by the electronic remote trading platform of the derivatives market.
The derivatives market of the BSE in futures and options contracts has been available to investors since 1995. BUX (the BSE’s main index) contracts have been available for trading since the start of the futures market on 31 March 1995. In July, 1998 the BSE was among the first exchanges in the world to introduce contracts based on individual equities. Another series of standardised derivatives in the options market appeared in February, 2000 and on 6 September 2004 trading commenced in the exchange’s second index, the BUMIX.
In April, 2000, after twelve years of operations as an independent legal person, the new BSE Council decided to convert to a business association in order to maintain and strengthen its competitive position. Effective 1 July 2002, the Budapest Stock Exchange Company Ltd. was set up (and from April 2006, as a Private Limited Company) and the BSE Council and BSE Secretariat were replaced by a Board of Directors and an Executive Board.
BSE is the key institution of the Hungarian Financial market and the official trading venue for publicly offered securities.
The exchange has pre-market sessions from 08:30am to 09:00am and normal trading sessions from 09:00am to 04:30pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance.[2]
About the Exchange
The Budapest Stock Exchange Ltd. (BSE) aims to ensure a transparent and liquid market for its listed securities issued either in Hungary or abroad. As the key institution of the domestic financial market, the stock exchange provides various economic entities with an opportunity to raise capital in an open market and offers investors effective investment opportunities. Through the concentration of supply and demand, it is the most important institution of price discovery.
The stock exchange actively participates in promoting the continuous improvement of the financial culture of domestic companies and investors.
The four main activities of the stock exchange:
Listing services: The BSE allows economic entities to acquire the financial resources required for their expansion in a cost-effective way. In addition, the BSE provides access to the dynamically growing assets of domestic institutional investors and to domestic investor savings. The exchange also provides investors with the simplest access to the global investor community.
Trading services: The BSE acts as the main platform to trade financial instruments. Currently, over 40 domestic and foreign broker companies take part in the exchange trading.
Dissemination of market information: The Exchange supplies real-time and accurate trading data of its listed securities and provides news services on issuers and section members. Through the exchange’s extensive data vendor network, both institutional and individual investors can access market data in a timely and efficient manner.
Product development: The BSE provides a trading opportunity for financial innovations, and offers a wide and constantly growing product range for investors on the futures and option markets. Index futures and options are calculated directly by the exchange. Investors seeking hedging opportunities or gearing can select from a wide array of individual stocks and currency, interest rate and commodity derivatives.
The Exchange’s main goal is to become the financial centre and primary trading venue of Hungarian securities, and to successfully take part in the competition for issuers. This is achieved by a client-oriented operation, a commitment to continuously improve its services and an application of timely and effective technological improvements and solutions.
[edit]History
[edit]Brief history of the Exchange
The Hungarian Stock Exchange, the ancestor of today’s Budapest Stock Exchange (BSE) started its operation on 18 January 1864 in Pest. Although the institution was set up as a stock exchange, four years after its inception it acquired the Grain Hall, the centre of grain trade, becoming the newly created Budapest Stock and Commodity Exchange (BSCE). Following 1889 the stock prices of companies listed on the Budapest Stock Exchange were also published in Vienna, Frankfurt, London and Paris, attesting to the international importance of the BSE. From the1890s Hungarian government bonds were regularly traded on the stock exchanges of London, Paris, Amsterdam and Berlin.
Following World War II, after the nationalisation of the majority of private Hungarian firms, the government officially dissolved the Budapest Stock and Commodity Exchange, and the exchange’s assets became state property.
After the re-establishment, on 21 June, 1990, the BSE re-opened its doors with 41 founding members and one single equity, IBUSZ, the Budapest Stock Exchange.
The open-outcry system of the physical trading floor that characterized the spot market functioned with partial electronic support until 1995. From 1995 until November, 1998 securities trading took place concurrently on the trading floor and in a remote trading system, when the new MultiMarket Trading System (MMTS), based entirely on remote trading was launched. The traditional “battlefield rumble” of the physical trading floor ceased within a year by September 1999, at which time physical trading was entirely replaced by the electronic remote trading platform of the derivatives market.
In April, 2000, after twelve years of operations as an independent legal person, the new BSE Council decided to convert to a business association in order to maintain and strengthen its competitive position.
The year 2004 brought some decisive events in the life of the Exchange. A major restructuring took place in the ownership structure of the BSE, involving the purchase of a majority stake in the Exchange by strong Austrian banks, together with Wiener Börse and Österreichische Kontrollbank AG.
Due to the integration of the activities of the Budapest Stock Exchange and of the Budapest Commodity Exchange, as of 2 November 2005, commodity trading also started on the BSE.
[edit]1864-1914: An Exchange is born
The Hungarian Stock Exchange, the ancestor of today’s Budapest Stock Exchange (BSE) started its operation on 18 January 1864 in Pest on the banks of the Danube (in a building of the Lloyd Insurance Company). The committee in charge of setting up the exchange was led by Frigyes Kochmeister, who was also elected as the first chairman of the exchange (1864-1900). Although the institution was set up as a stock exchange, four years after its inception it acquired the Grain Hall, the centre of grain trade, becoming the newly created Budapest Stock and Commodity Exchange (BSCE). It operated under this name for 80 years as one of the leading stock exchanges in Europe. When the exchange was launched in 1864, there were 17 equities, one debenture, 11 foreign currencies and 9 bills of exchange listed. After a few years of slow growth, 1872 saw the first significant market boom, when the Minister of Trade approved the articles of incorporation of 15 industrial and 550 financial companies whose shares were then listed on the exchange.
The BSCE moved into a new building in 1873 and until 1905 continued its operations in a building on the corner of Wurm Street (now Szende Pál Street) and Maria Theresia Street (now Apáczai Csere János Street). In 1905 it relocated to the Exchange Palace on Szabadság square (now TV Headquarters) until shortly after WWII in 1948.
The first real market crash of the exchange occurred in May, 1873. It took over a decade and a half following the crash before domestic investors regained confidence to invest in the stock market again.
The early 1890s marked another period of spectacular market boom in the exchange’s history, partially fuelled by a general investment optimism that was characteristic of the Millennium years, and by recent trends in the international stock markets. Following 1889 the stock prices of companies listed on the Budapest Stock Exchange were also published in Vienna, Frankfurt, London and Paris, attesting to the international importance of the BSE. From the 1890s, Hungarian government bonds were regularly traded on the stock exchanges of London, Paris, Amsterdam and Berlin. A new invention, the telephone, was the main source of communication during these years.
By the turn of the century, there were already 310 securities traded on the exchange; by the beginning of World War I, this increased to almost 500. The annual turnover in 1913 reached one million shares and the turnover of the Budapest Giro and Mutual Society amounted to 2.7 billion Crowns (the ancestor of the Forint). At the same time there was also a dynamic expansion in grain trading with almost 400,000 tons in 1875, growing to one million tons by the turn of the century and close to one and a half million tons by WWI. As a result of this expansion the BSCE was propelled to become the leading grain exchange in Europe.
[edit]1914-1948: From one world war to another
As in most European countries, the outbreak of World War I brought about the exchange’s closure on 27 July 1914, although trading did not cease. Brokers continued trading during the war and equity prices showed a massive increase starting in 1914. By 1918 over 7.2 million securities had been traded in a year.
The exchange reopened after the war were, the post-war inflationary environment pushed exchange turnover to exceptional highs, tempered only by the introduction in 1925 of the country’s new currency, the pengő. The following four years leading to the market crash of the New York Stock Exchange in October 1929 saw the downturn of the BSCE. On 14 July, 1931, the BSCE was closed down again as a result of a German banking moratorium and a series of financial collapses of the continent’s major banks. Bond trading officially resumed only in 1932, followed by trading in the 18 most traded equities. Following a short period of recovery, the market entered an expansionary phase in 1934, reaching its peak in 1936.
When Hungary entered World War II, the exchange saw a period of unprecedented boom and equity prices in the heavy and military industries increased greatly. In 1942 the government applied stricter measures for the BSCE articles of incorporation, prohibited private trading in equities, required specific reporting obligations on equity portfolios and set maximum values on daily price changes. Despite these restrictions the exchange was able to continue its operations until the start of the city’s siege in mid-December, 1944.
World War II was followed by a period of hyperinflation, characterized by a lively private stock and real exchange trading in currencies and precious metals, conducted partially in the damaged building of the exchange and partially in the neighbouring coffee-houses. The exchange officially re-opened in August, 1946, following the launch of the Forint on August 1. As companies defaulted on their payments of bonds issued previously in the crown and pengő currencies, and since limited companies failed to pay dividends on their stocks due to the war damages they suffered, prices kept falling., Two months after the 1948 nationalisation of the majority of private Hungarian firms, the government officially dissolved the Budapest Stock and Commodity Exchange, and the exchange’s assets became state property.
[edit]From 1990 until today: Rebirth
The first official milestone in the history of the newly created Budapest Stock Exchange was the government’s decision to give green light for the preparation of the Securities Act of 1989. The draft bill was submitted to Parliament in January 1990 and came into force on 1 March. At the same time that the bill came into force on 21 June, 1990, the BSE held its statutory general meeting and the Exchange re-opened its doors. With 41 founding members and one single equity, IBUSZ, the Budapest Stock Exchange was set up as a sui generis organisation (an independent legal entity). The re-establishment of the market economy during the same time and the privatization of businesses played a decisive role in the exchange’s operations. Even though the sale of the larger state-owned businesses often involved the assistance of strategic investors, the BSE played a significant role in the privatisation of many leading Hungarian companies (including IBUSZ, Skála-Coop, MOL, OTP. Matáv (today Hungarian Telecom), Domus, Globus and Richter).
Over the years, there have been major changes in the operating conditions, organisation and function of the BSE. The first trading floor was in the Trade Center on Váci Street, followed by its move in 1992 to the atmospheric old building at 5 Deák Ferenc Street in District V, where it continued its operations for 15 years. In March, 2007 the BSE moved to its current headquarters to the former Herczog Palace at 93 Andrássy Road.
The open-outcry system of the physical trading floor that characterized the spot market functioned with partial electronic support until 1995. From 1995 until November, 1998 securities trading took place concurrently on the trading floor and in a remote trading system, when the new MultiMarket Trading System (MMTS), based entirely on remote trading was launched. The traditional “battlefield rumble” of the physical trading floor ceased within a year by September 1999, at which time physical trading was entirely replaced by the electronic remote trading platform of the derivatives market.
The derivatives market of the BSE in futures and options contracts has been available to investors since 1995. BUX (the BSE’s main index) contracts have been available for trading since the start of the futures market on 31 March 1995. In July, 1998 the BSE was among the first exchanges in the world to introduce contracts based on individual equities. Another series of standardised derivatives in the options market appeared in February, 2000 and on 6 September 2004 trading commenced in the exchange’s second index, the BUMIX.
In April, 2000, after twelve years of operations as an independent legal person, the new BSE Council decided to convert to a business association in order to maintain and strengthen its competitive position. Effective 1 July 2002, the Budapest Stock Exchange Company Ltd. was set up (and from April 2006, as a Private Limited Company) and the BSE Council and BSE Secretariat were replaced by a Board of Directors and an Executive Board.
Subscribe to:
Posts (Atom)
