Forex is the world biggest financial market. In April 2004, average daily volume used to be 1.9 trillion US dollars, which is higher than:
*eleven average volumes of all world stock exchanges together (167 billion US dollars);
*forty average volumes of NYSE - biggest stock exchange in the world (46 billion US dollars);
*300 US dollars every day for every world citizen.
By April 2007, average daily volume increased to 3.2 trillion US dollars (~70% higher than in April 2004).
Most important markets: USA, United Kingdom and Japan. More than half of Forex volume is done in the UK and USA. Highest activity is detected in period of different markets' working hours interference.
We at Forex4you believe that no advice or a hint can compare to those of real, practising traders with hands-on experience. That's why we decided to start a new section on our site - Successful traders!
Forex4you is going to choose some of the most successful clients, and ask them for interviews! Let great traders share their experiences and wisdom with beginners and newbies, we say!
Our first "Successful trader" is Kase Cheah from Australia. Interview with him is available at the following link:
Successful traders - Kase Cheah, Australia
It contains a lot of relevant information, advices and hints! Highly recommended to read!
Forex technical indicator is a mathematical manipulation of a security price and volumes aimed at forecasting of future price changes. Trader is able to make decisions about how and when to enter or exit market, which position it is more suitable to open, on the basis of signals from technical indicators.
There are a lot of technical indicators although many of them have very slight differences.
According to their functions, indicators can be divided into three groups:
*Trend indicators help to assess the price direction and detect the turn moments synchronously or with a delay.
*Oscillators allow one to find the turning moments a little in advance or synchronously.
*Psychological indicators provide the information about the overall mood of market participants.
Technical indicators can be drawn up in a separate indicator window or they can be imposed directly into the price chart. For better forecasts several indicators may be used.
Metatrader 4 has a variety of built-in indicators. Use the menu at the top of the page to find out more about them.
* The NFA – the National Futures Association. The NFA is a self-regulatory organization for the US futures industry. Its purpose is to safeguard market integrity and protect investors by implementing forex regulations. Membership in NFA is mandatory for any futures or forex broker operating in the US .It is an independent regulatory body with no ties to any specific marketplace.
* The CFTC – the Commodity Futures Trading Committee. Created by congress, the Commodity Futures Trading Commission (CFTC) was formed in 1974 as an independent agency with the mandate to issue forex regulations for financial markets in the United States. The CFTC's forex regulations assure the economic utility of the markets by encouraging their competitiveness and efficiency, and protecting market participants against and abusive forex trading practices.
The CFTC has some regulatory authority over retail off-exchange forex markets. The Commodity Exchange Act (CEA) allows the sale of over-the-counter forex futures and options to retail customers if, and only if, the counterparty (the person on the other side of the transaction) is a regulated entity.
These regulated entities include the following: financial institutions, such as banks and savings associations, registered broker-dealers and certain of their affiliates, registered futures commission merchants (FCMs) and certain of their affiliates, certain insurance companies and their regulated affiliatess financial holding companies, and investment bank holding companies. Under the CEA, the CFTC has the authority to shut down any unregulated entity that acts as a counterparty to forex futures oroptions transactions with retail customers. The CFTC also has the authority to take action against registered FCMs and their affiliates for violating the anti-fraud and anti-manipulation pro-visions of the CEA in connection with OTC forex transactionsinvolving retail customers, but the CFTC cannot adopt rules toregulate these transactions. NFA (National Futures Association) has rules to protect customers in the retail off-exchange forex market.
As mentioned later in this article, firms that introduce customers to forex dealers do not have to be regulated entities. NFA’s rules provide, among other things, that a forex dealer FCM must take responsibility for the activities of unregulated entities that solicit retail customers. Additionally, NFA’s rules require forex dealer FCMs to: observe high standards of commercial honor and just and equitable principles of trade in connection with the retail forex business; supervise their employees and agents and any affiliates that act as counterparties to retail forex transactions; maintain a minimum net capital requirement based on the value of open customer positions; and collect security deposits from those customers. NFA’s forex rules do not apply to all FCMs and their affiliates, however. Therefore, you should ask the dealer if NFA regulates its forex activities.
In the United Kingdom, operations of Forex brokers are regulated by FSA - Financial Services Authority.
The Financial Services Authority is non-governmental, independent body, whose primary function is to make financial retail markets that is, the markets that most of us use for trading-- work more efficiently. Their main goal is, essentially, to ensure that retail customers (that is, the little guys on the bottom of the financial dog-pile) get a fair deal.
Starting in 2004, the FSA has created a UK-wide strategy to build up the country's financial capability (in all markets, not just Forex), as well as raise confidence among consumers. In other words, they've put plenty of rules in place that make consumers more comfortable taking part in the market.
This affects UK brokers who work on behalf of residents in the UK in several ways. For one, according to FSA regulations, all legit Forex brokers must meet strict financial standards. These brokers are required to work with FSA financial regulators, submitting regular financial reports and proving that they follow regulations at all times. Brokerage firms who are found in violation are either fined or, in extreme cases, have their regulatory status terminated.
While strict rules may keep some good brokerage firms from operating in the UK, these harsh rules are generally pretty good for you. Since the FSA keeps records of any formal proceedings they've had to enter into against regulated firms, any information about rule breakers (that is, Forex brokers that you shouldn't trust) are kept on record. Simply by visiting the FSA website, you can find out if the firm you're considering using has had any serious problems or infractions. And that's very useful information - after all you can lose your money on the Forex market because of a bad broker.
India has a rather strict foreign currency exchange policy - even though many liberalization measures have been taken recently, it's still an economically isolated, or highly protected country. Indian currency - rupee, is highly regulated by the national banking authority - Reserve Bank of India, and so Indian citizens still cannot freely exchange rupee to other currencies, they have to prove their need and there are annual limits for different needs (more). Even popular money transfer systems such as Western Union which is spread worldwide and available to everyone, are forbidden in India - residents can only receive money, but not send.
However, because of the globalization there is a definite need to open the economy, so Reserve Bank of India has been softening rules and regulations in recent years.
One of the important changes in regards to Forex trading is that in year 2008 Reserve Bank of India has finally allowed currency futures trading. Speculative trading became a permissible operation too - since it became impossible to ask for a proof of a hedging need.
We at Forex4you are happy that one of the biggest and the most perspective country in the world is finally joining the world of opportunities of Forex trading market!
More details are available on the official website of RBI - here Note that Indian brokers are only allowed to provide USD/INR pair at the moment. Since we're located outside India, in British Virgin Islands, we do provide customers with many more pairs, many of which are much more interesting for traders because of their nature. Rupee, being a highly regulated currency, is not as volatile as other currencies and doesn't allow as much analysis since movements depend on RBI decisions and not on market events.
Our another advantage over brokers registered inside India is that we don't have any fees or minimum transactions/deposits. Services are much more affordable at our company!
Even though we're registered outside India, we do have an office in Mumbai where an Indian company that has a contract with us, provides our Indian stakeholders with support and consultations.
As we know, there is only one way to make money trading; buy lower and sell higher (or sell higher and buy back lower for short sales). To buy lower and sell higher prices must trend higher from where you bought (or lower from where you sold). If prices never trended there would never be an opportunity to make a profit! Furthermore, without up and down price movements institutional traders (hedgers) would have no need to insure themselves from price changes and trading volume would disappear What this means is that price trends are the essence of all-profitable trading.
The realization that trends are the essence of profitable trading makes the idea of trading currencies very exciting, because currencies are the worlds best trending markets! Countless studies of trend following systems prove that currency trends are the most consistent and often the most profitable. Regardless of the type of trend following system used; long term, intermediate term or short term, currencies invariably outperform all other markets including stocks, bonds and other commodities. It should come as no surprise that some of the worlds' most successful traders are currency traders.
One-reason currencies trend better than every other market is because of their macro-economic nature. Unlike many commodities whose supply and demand fundamentals can literally change with the weather, currency fundamentals are often less random and more predictable.
In summary, Forex Trading is not conducted on a regulated exchange and as a result there are additional risks involved, and this type of trading may not be suitable for all individuals, but currencies remain one of the best all around markets. Currencies represent the worlds' largest market place, and have the most powerful and persistent price trends.
