Forex@all

The foreign exchange market (forex or FX) is a global market in which trading occurs in a retail off-exchange environment, which means there isn't a localized exchange where everybody trades and it is primarily done through an online trading platform provided by different Broker firms.
Unlike equities, which trade through exchanges worldwide such as the NYSE or the NASDAQ, foreign exchange transactions take place over-the-counter (OTC) between buyers and sellers from all over the world. Because this network of participants is not centralized, the exchange rate of any currency pair can vary from one broker to another. (To get a complete overview of forex, see The Forex Market at investopedia.com/university/forexmarket and Forex Basics at traderschoicefx.com/learn-forex/basics/index.html.
The main players in the forex market are the top banks in the world. This group creates the market for currency trading and they are known as the interbank market. Retail traders are unable to access the interbank market, but they can trade forex through two types of brokers: market makers and electronic communications networks (ECNs). The main differences between these two types of brokers and how they can affect your forex trading, are discussed below.
Forex Market Maker Broker
Market makers "make" or set both the bid and the ask prices on their trading systems and display them to their customers, on their quote screens. They stand ready to make transactions at these prices with their customers, who range from banks to money managers to individual retail forex traders. In doing this, market makers provide some liquidity to the market. As counterparties to each forex transaction, market makers must take the opposite side of your trade. In other words, whenever you buy, they must sell to you and vice versa.
The exchange rates that market makers set are based on their internal guidelines. They mainly generate profits through the spread that is charged to their customers. The "spread" is the difference between the bid and the ask price and is often fixed by each market maker. Spreads typically remain competitive due to the number of market makers providing services in the retail off-exchange market. By generating profit on the spread, market makers can offer "no commission" or "zero commission" trades. Since these market makers are counter-parties to your transaction, they will often hedge the transaction, but may decide to hold your order and trade against you.
The two main market makers in the industry are Institutional market makers and retail market makers. Institutional market makers are banks or large corporations who usually that offer quotes to other banks, ECN's or corporations. Retail market makers are solely dedicated to offering retail off-exchange forex trading to individual traders.
Upside:
1. The trading platforms tend to be user-friendly
2. Some of them come with free charts
3. Some of them come with free Expert Advisors (automated trading robots)
4. Price movement can be less volatile
5. Some of them offer free news feeds
Downside:
1. If they trade against you, it presents a clear conflict of interest in order execution
2. They quotes may be worse than what you would receive at an ECN
3. Slippage or requotes may occur
Forex ECN Broker (Electronic Communications Network)
An ECN collects prices from numerous market participants, ranging from banks to market makers to other ECN's and they display the best possible bid/ask quotes on their trading platforms based on the prices they receive. When ECN's act as a counterparty, it is on a settlement basis as opposed to a pricing basis. Depending on a currency pairs volatility, an ECN's spread may be more or less and is often not fixed.
ECN's generate profits by charging a commission for each transaction. Some of them do not make a profit on the bid/ask, but some of them do, in addition to the commission. You should take into account your overall trading strategy and how commissions on a trade may or may not affect you as a trader.
ECN's may also be Institutional or Retail. Institutional ECNs relay pricing from numerous banks to other banks and corporations. Retail ECN's usually relay pricing from just a few banks to individual retail off-exchange forex traders.
Upside:
1. Since pricing is derived from several sources, it may often be better
2. Sometimes there is no spread at all on the majors
3. Typically do not trade against their customers
Downside:
1. Most of them do not offer charts
2. Most of them do not offer Expert Advisors
3. Most of them do not offer news feeds
4. They are not as user-friendly
5. Traders have to pay commissions on each transaction
Choosing the Right Forex Broker
Your trading performance can be impacted by the particular broker you choose. Are you going to adopt a long term trading strategy or a short term trading strategy (scalping)? Do you have nerves of steel or would you rather have an Expert Advisor (automated trading robots) do the trading for you? These are all questions you must ask yourself when choosing the right broker for you. For more information about choosing the right broker, please click on the link at traderschoicefx.com/broker-review.html for How to Choose the Right Forex Broker.
For more trading strategies, go to TradingMarkets.com/reports.

source:biz.yahoo.com

In a bid to mitigate forex risk for large corporates, ICICI Bank has developed a customised online trading platform that would enable companies to cover their market risk in different currencies and assist in taking financial decision.
“ICICI Bank E-Dealz through the full-fledged customised system, can now book the forex deals in less than 5 minutes, something that took a day earlier,” ICICI Bank Head Global Markets Group, Ms Shilpa Kumar said.
The system has the capability of booking the trades from centralised or decentralised client location, she said, adding it provides the real time deal log with complete deal history and captures the efficiencies of straight through processing.
To begin with, the customised solution is subscribed by the ABB Ltd, a global leader in power and automation technologies, she said.
With this particular forex solution, Kumar said, the bank is targeting customers who do significant number of forex transactions on daily basis.
Commenting on the solution, ABB Ltd said it is efficient, transparent and has focus on treasury management rather than treasury administrative work.
The consolidated portfolio view makes the trade execution very efficient and now the company can track its cash flows from export and import remittances from different location on a real time basis, ABB Ltd country Treasurer Mr Sundaram Nagasamy said.

source:thehindubusinessline.com

When new clients come to me, I ask them a few questions about risk. One is "What would you do if the value of your stocks fell by 50%?"
The vast majority answer that they would buy more stocks. So now that the market has lost about 40% of its value, why are some of these same clients clamoring to sell?
Risk tolerance ebbs and flows. From 2003 to 2007, U.S. stock prices nearly doubled and international shares nearly tripled.
During such good years, you tend to believe that you have a high tolerance for risk. At times like these, your willingness to take chances drops sharply.
Such mood swings can lead you to jump in and out of the market and chase good performance, with devastating results.
According to a 2007 study of investor returns from 1991 to 2004 published in the Journal of Banking & Finance, the average investor pays a 1.5-percentage-point annual penalty for that kind of behavior.
My advice is to never rely on a risk questionnaire to tell you how much you should have in the market.
I ask about risk tolerance only to make the point that hypothetically losing half of your portfolio doesn't inspire the same fear that actually losing it will.
Your investment strategy should instead be based on your goals, your time horizon and what you've saved so far. Success will come from sticking to your plan.
But as you're learning now, buying stocks is emotional. Your investments represent security and freedom. And as you watch your balances decline, you see your dreams fade too. Hence the nervous calls.
What I'm saying is that while I can't make any promises, I wouldn't bet against capitalism over the long run. Chances are, you'll look back and see that this was a buying opportunity.
In times like these, you should push yourself to take more risk than feels comfortable. And in good times, go out on a limb less than you're inclined to.
I'm feeling shock too. But I've bought more stock-index funds. It's scary, but it's also likely the right thing to do.

source:money.cc.com

Our Forex Automated Trading Signals have hinted at a possible EURUSD trade in the coming minutes. Looking at our signal below, clues to which strategy will be implemented appear to be seldom. One thing we can deduce is that the trend continues to be southbound. Continue to check back with our signals page in the coming minutes for updates.


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source:yahoo news

The Euro corrected lower overnight to find support at 1.2732, the 38.2% Fibonacci retracement of the 300-pip intraday rally that took the pair as high as 1.2846 in New York hours. The pullback in the British Pound was more pronounced: sterling retraced 50% (1.4642) of the intraday rally to 1.4814 and then turned range-bound between this and the 38.2% Fib level (1.4683).

Australia’s AiG Performance of Construction Index dropped for the ninth consecutive month in November as a sluggish economy and scarce access to lending kept consumers away from big ticket purchases. Spreading expectations that Australia will experience recession in 2009 have seen the RBA slash interest rates by a whopping 3% since early September. That said, Reserve Bank Governor Glenn Stevens noted earlier this week that the “major easing in monetary policy…together with spending measures announced by the Government and a large fall in the Australian dollar” will support demand over the year ahead (albeit, Stevens said this as the RBA cut interest rates by another full percentage point). Still, traders continue to price 15-100 basis points in easing over the next 12 months.

The economic calendar is noticeably uneventful in European hours, with German Factory Orders the only data set to print. Expectations call for orders to lose -0.5% from the preceding month, pointing to a -11.2% decline in the year to October. This will amount to the second-worst reading ever recorded for the metric and the lowest since at least 1993. Industrial output is an important part of the Euro Zone’s largest economy, contributing over 30% to overall growth. Looking ahead, manufacturing can be expected to remain under pressure: industrial goods dominate Germany’s top export commodities and sluggish economic performance around the world is sure to trim demand. That said, some stimulus may be had from continued currency depreciation, making German goods relatively cheaper for overseas buyers. DailyFX Chief Strategist Antonio Sousa expects the Euro to continue to lose value through 2009.

source :yahoo news