Insurance Forex

Currency or forex or FX : market exists wherever one currency is traded for another. It is by far the largest financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The average daily trade in the global forex and related markets currently is over US$ 3 trillion.[1] Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks, and are subject to forex scams

Market size and liquidity

The foreign exchange market is unique because of

* its trading volumes,

* the extreme liquidity of the market,

* the large number of, and variety of, traders in the market,

* its geographical dispersion,

* its long trading hours: 24 hours a day (except on weekends),

* the variety of factors that affect exchange rates.

* the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)

According to the BIS, average daily turnover in traditional foreign exchange markets is estimated at $3,210 billion. Daily averages in April for different years, in billions of US dollars, are presented on the chart below:

This $3.21 trillion in global foreign exchange market "traditional" turnover was broken down as follows:

* $1,005 billion in spot transactions

* $362 billion in outright forwards

* $1,714 billion in forex swaps

* $129 billion estimated gaps in reporting

In addition to "traditional" turnover, $2.1 trillion was traded in derivatives.

Exchange-traded forex futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts. Forex futures volume has grown rapidly in recent years, and accounts for about 7% of the total foreign exchange market volume, according to The Wall Street Journal Europe (5/5/06, p. 20).

Average daily global turnover in traditional foreign exchange market transactions totaled $2.7 trillion in April 2006 according to IFSL estimates based on semi-annual London, New York, Tokyo and Singapore Foreign Exchange Committee data. Overall turnover, including non-traditional foreign exchange derivatives and products traded on exchanges, averaged around $2.9 trillion a day. This was more than ten times the size of the combined daily turnover on all the world’s equity markets. Foreign exchange trading increased by 38% between April 2005 and April 2006 and has more than doubled since 2001. This is largely due to the growing importance of foreign exchange as an asset class and an increase in fund management assets, particularly of hedge funds and pension funds. The diverse selection of execution venues such as internet trading platforms has also made it easier for retail traders to trade in the foreign exchange market. 

Because foreign exchange is an OTC market where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house. The biggest geographic trading centre is the UK, primarily London, which according to IFSL estimates has increased its share of global turnover in traditional transactions from 31.3% in April 2004 to 32.4% in April 2006. RPP

The ten most active traders account for almost 73% of trading volume, according to The Wall Street Journal Europe, (2/9/06 p. 20). These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually 0–3 pips. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203. Minimum trading size for most deals is usually $100,000.

These spreads might not apply to retail customers at banks, which will routinely mark up the difference to say 1.2100 / 1.2300 for transfers, or say 1.2000 / 1.2400 for banknotes or travelers' checks. Spot prices at market makers vary, but on EUR/USD are usually no more than 3 pips wide (i.e. 0.0003). Competition has greatly increased with pip spreads shrinking on the major pairs to as little as 1 to 2 pips.

Forex News

End of the year trade is in full effect and lower volumes than normal has not increased volatility very much as can sometimes happen.  This has provided some low risk opportunities as prices have vacillated back and forth between the tight ranges.

There is not a lot of news in the global economy today, particularly from an economic data release perspective.  In fact, most of the news expected for today’s US session has already been released with the exception of mortgage applications which are due out later this morning but unlikely to have a material effect on the markets.

One of the more interesting stories in the global markets is that the price of oil has been rising and is back over $100/barrel.  This is due to some potential unrest coming out of Iran, who is using this opportunity to make some noise by threatening the international supply of oil.  This situation is more bark than bite at the moment, but you never know how quickly these things can escalate.  In any event, higher oil prices have been supportive of a stronger Canadian dollar.  For those unaware, the Canadian dollar is positively correlated to the price of oil.

The economic data released today came from Japan and was basically negative across the board.  Household spending, retail trade figures, and industrial production figures all came in lower than expected.  CPI data also showed that deflation is going to continue, but the unemployment rate remained steady at 4.5%.

So the economic data in Japan is not good and much of the blame is going to be blamed on a stronger Yen.  This has prompted Japan to seek bi-lateral deals for their currency reserves with the likes of China and India thereby effectively making funds available for trade.  While this story hasn’t received a lot of press, it is important as it removes the US dollar as an intermediary and is a blow to the Dollar as the world’s reserve currency status.  If more countries seek bilateral currency agreements then the use of the US dollar becomes less important.  For all of the talk about currency manipulation, most of the world outside of the US believes that the US Fed is the biggest currency manipulator around the globe.  It is no surprise that the US admonished Japan today for their direct currency interventions to stem Yen gains over the past year.  This could be a story that plays out over the course of the 2012, so stay tuned and read between the lines of this one!

This caused Asian markets to sell off overnight and the Yen to strengthen, though year-end complacency means that the moves were very minor.

Markets reversed course however once the European session began as the debt auction in Italy went off much better than expected.  6-month bills were auctioned at rates roughly half of what they were paying just last month.  This is a huge step in the right direction and means that funding costs are significantly lower.  Longer-term debt will be issued tomorrow and if borrowing costs resemble what happened today, then this bodes well for risk appetite heading into the New Year.  Some are saying that this has occurred because of the ECB loans given a few weeks ago that have essentially allowed the banks to set up carry trades for sovereign debt.  This will increase demand and allow yields to drop which is what the indebted nations need right now.

In Switzerland, the KOF leading indicators index came in lower than expected, posting a gain of .01 vs. an expectation of .23.  This cause the franc to strengthen a bit, but again, holiday trading is means these are non-factors.

In the US, mortgage applications will be due out later but will not be a factor either.  Short-term traders should continue to trade the ranges, and longer-term traders should be thinking about what they would like to be in for the New Year.

The economic data is starting to look better, including retail sales figures due to the holidays so if Europe can get the debt crisis under control and if US politics can provide some sensible solutions, then 2012 could be a very god year for risk assets.

Cheap money due to US Fed policy could make its way to both stocks and commodities and while that would normally be inflationary, the inflation could be masked by lower home prices and wages due to elevated unemployment.

So there is a lot to think about for the New Year but by coming up with a plan of action, you could put yourself ahead of the game!

End of the year trade is in full effect and lower volumes than normal has not increased volatility very much as can sometimes happen.  This has provided some low risk opportunities as prices have vacillated back and forth between the tight ranges.

There is not a lot of news in the global economy today, particularly from an economic data release perspective.  In fact, most of the news expected for today’s US session has already been released with the exception of mortgage applications which are due out later this morning but unlikely to have a material effect on the markets.

One of the more interesting stories in the global markets is that the price of oil has been rising and is back over $100/barrel.  This is due to some potential unrest coming out of Iran, who is using this opportunity to make some noise by threatening the international supply of oil.  This situation is more bark than bite at the moment, but you never know how quickly these things can escalate.  In any event, higher oil prices have been supportive of a stronger Canadian dollar.  For those unaware, the Canadian dollar is positively correlated to the price of oil.

The economic data released today came from Japan and was basically negative across the board.  Household spending, retail trade figures, and industrial production figures all came in lower than expected.  CPI data also showed that deflation is going to continue, but the unemployment rate remained steady at 4.5%.

So the economic data in Japan is not good and much of the blame is going to be blamed on a stronger Yen.  This has prompted Japan to seek bi-lateral deals for their currency reserves with the likes of China and India thereby effectively making funds available for trade.  While this story hasn’t received a lot of press, it is important as it removes the US dollar as an intermediary and is a blow to the Dollar as the world’s reserve currency status.  If more countries seek bilateral currency agreements then the use of the US dollar becomes less important.  For all of the talk about currency manipulation, most of the world outside of the US believes that the US Fed is the biggest currency manipulator around the globe.  It is no surprise that the US admonished Japan today for their direct currency interventions to stem Yen gains over the past year.  This could be a story that plays out over the course of the 2012, so stay tuned and read between the lines of this one!

This caused Asian markets to sell off overnight and the Yen to strengthen, though year-end complacency means that the moves were very minor.

Markets reversed course however once the European session began as the debt auction in Italy went off much better than expected.  6-month bills were auctioned at rates roughly half of what they were paying just last month.  This is a huge step in the right direction and means that funding costs are significantly lower.  Longer-term debt will be issued tomorrow and if borrowing costs resemble what happened today, then this bodes well for risk appetite heading into the New Year.  Some are saying that this has occurred because of the ECB loans given a few weeks ago that have essentially allowed the banks to set up carry trades for sovereign debt.  This will increase demand and allow yields to drop which is what the indebted nations need right now.

In Switzerland, the KOF leading indicators index came in lower than expected, posting a gain of .01 vs. an expectation of .23.  This cause the franc to strengthen a bit, but again, holiday trading is means these are non-factors.

In the US, mortgage applications will be due out later but will not be a factor either.  Short-term traders should continue to trade the ranges, and longer-term traders should be thinking about what they would like to be in for the New Year.

The economic data is starting to look better, including retail sales figures due to the holidays so if Europe can get the debt crisis under control and if US politics can provide some sensible solutions, then 2012 could be a very god year for risk assets.

Cheap money due to US Fed policy could make its way to both stocks and commodities and while that would normally be inflationary, the inflation could be masked by lower home prices and wages due to elevated unemployment.

So there is a lot to think about for the New Year but by coming up with a plan of action, you could put yourself ahead of the game!

The Swiss Franc

The Swiss franc has strengthened vs. the Euro (among others) as the SNB elected to take a wait and see approach to their monetary policy as they made no changes.  This means that the interest rate is still at 0%, and that the target vs. Euro remains at 1.20.

There were some in the market who wanted to see them raise the target to 1.30 as franc strength has been hurting exports.  There were also rumors being floated that perhaps they would consider negative interest rates.  Neither action materialized so the franc moved higher as a result.

At this point, the economic data is beginning to weaken in Switzerland and inflation is not a problem as in fact they are seeing deflation.  This situation looks eerily similar to what has occurred in Japan, and this will be a difficult cycle to break without major risks to the economy.

With the Euro debt crisis still providing risk to the markets, there may be a test of that 1.20 level at some point, especially if the Euro situation worsens.  Will the SNB have the moxie to defend the 1.20 level?  Stay tuned!

Good things about FOREX

Some good things about Forex:

1- Forex is an online home based business that doesn’t need referring, recruiting and advertising. You only deal with the currencies through the Internet. So you will not have to reply any email, make any phone call and spend any money on advertising.

2- If you learn Forex trading properly, you can make a lot of money. Forex can be your full time job that makes thousands of dollars for you every month. I have to emphasize again that if you start working on Forex before you learn it properly, it can be risky and you will lose your money. It is like driving. If you drive a car, before you learn to drive properly, you will hurt yourself and others but if you learn it properly first, it will be pleasant and funny.

3- You can make a lot of money by spending a small amount of money. Unlike other investments like stock market that you have to invest a lot of money to make a reasonable profit, you can make a good income through investing small amount of money. For example, with a $5000 account, you can make about $5000 per month. Of course it highly depends on the way that you trade and the strategy that you follow but good and experienced traders can double their money every month.

4- Forex - and of course stock market - are the only businesses that competition has positive impact on them. It is amazing, isn’t it? Competition is the biggest problem in all other businesses but in Forex, it helps the traders to make more money. Why?

Supply and demand are the factors that determine the price in any market. When there are too many buyers and sellers, price volatility will be much higher and market will be more dynamic. Price will go up and down more frequently and this is what we need to make money. When price goes up we buy and when it goes down we sell and make profit.

So if you choose Forex as your business, you will not have to be worried about competition.

What is Forex? If you are looking for a business to make money full time or part time, Forex is the best option. It can make reasonable decent income for you and on the other hand, you will not have to be worried about the problems like marketing, advertising, referring and recruiting and even you will not have to be worried about competition.

On this weblog, I am trying to help people to learn forex. I share my knowledge and experience with them. If you like to trade forex and make money and also learn to become a profitable and professional forex trader and forex market analyst. Good Luck!!!!!