Decided to invest in the stock market and confused about the forex quotes. It really seems difficult to understand the forex quotes at first step but a foreign exchange quote is not as difficult as it appears to be. It’s mandatory to understand the forex quotes before you are going to make your first investment in the currency trading. To conquer the currency trading there are two important things to remember about the forex quotes:
• The first currency listed first is the base currency and
• The value of the base currency is always 1.
While trading forex, two-sided quotes come across, which consists of a bid and an Ask
Bid: Bid is the price at which one can sell the base currency
Ask: Ask is the price at which one can buy the base currency and at the same time selling the counter currency.
Foreign Exchange Trading Quotes Tips
• US dollar is considered as the 'base' currency for quotes. It includes USD/JPY, USD/CHF and USD/CAD in the majors.
• Combination of two currencies involved in trade is known as “cross”. USD/JPY means that the forex quote is valid for someone who wants to use United States Dollars to buy Japanese Yen.
• Quotes are generally expressed as a unit of $1 USD per the second currency quoted in pair. A quote of USD/JPY 120.01 means that one U.S. dollar is equal to 120.01 Japanese yen.
• When a currency quote goes up, it means that dollar has appreciated in value and the other currency has gone down.
• If the USD/JPY quote increases to 123.01, the dollar is stronger because it will now buy more Yen than before. British pound (GBP), the Australian dollar (AUD) and the Euro (EUR) are the three exceptions to the above mentioned rule. If a quote is GBP/USD 1.436 it means that one British pound equals 1.4366 U.S. dollars. In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar.
Friday, November 21, 2008
Ciphering the Forex Quotes
Currency Quote
ADVERSE CURRENCY FLUCTUATIONS
Don't run the risk of fluctuations! Currency Brokers, can, by fixing a rate for your currency requirements today for a purchase in the future (up to 6 months).
Currency Example... The Pound against the Euro... 16 months ago was ¬1.48/ £1.00; 6 months later it was ¬1.32/ £1.00. On a £100,000 transfer the difference in those 6 months is £12,000
Currency Example... Again the Pound against the Euro... in February 2008 the exchange rate was ¬1.32/ £1.00; in July 2008 it is ¬1.26/ £1.00. On a transfer of £200,000 the difference in those 6 months have been ¬8,000 (approx £6,000)
When getting a currency quote the Currency Broker can give you a quote by using a fixed rate that is valid for 6 months. Using the Euro against the pound is, and has been a good example of two currencies on the move with fluctuations daily
Trading Currencies and Buying Property Abroad are the two major reasons for changing currency. A close third is when regular payments are made to a different country and subsequent different currency. However a casual approach which is taken by many when buying property abroad can be the single most expensive part of buying abroad.
Getting a 'Currency Quote' when buying property abroad is obviously an important process, but more importantly is getting at least two quotes, possibly three. At the end of the day it is a competitive market and we should compare quotes.
To conclude; where I started about currency fluctuations... When buying property abroad, remember this process... When you first have an offer accepted it is wise to get a currency quote and ask about getting a fixed rate quote which will be valid for 6 months. Plus get the advice of the currency broker as they deal within currencies 24/7. Many experts have suggested the Euro has hit its peak against the Pound and perhaps over the next 6 months the pound may gain some ground lost over the last year.
Thursday, August 28, 2008
Forex Robots - 6 X Facts That Cause Most to Lose Equity
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If you want to buy a forex robot, you should consider the facts enclosed because if you understand them you can avoid the losing majority of automated forex trading software and find the small minority that win...
Here are your forex robot facts - make sure you understand all of them before buying one.
Fact 1: Most Do Not Have Real Track Records
They claim to have made money but a quick look at the disclaimer shows they are simply paper simulations going backwards and you see the words in hindsight and simulated in the disclaimer. See this and pass it by, it probably won't make you any money for the next reason.
Fact 2: Most Robots are Curve Fitted
This means when the simulation is done, the rules are simply bent until they fit the data segment being tested shows a profit and this is pointless. Why?
Because the same price history will never repeat itself again exactly as before and you cant bend the rules going forward!
Fact 3: You Can't Win on 100 investment
The fact that anyone says you can is relying on you being very, very lucky, or knows nothing about forex trading.
The minimum you should consider is a $1,000 and preferably $3,000, to ride out any drawdown periods.
Fact 4: Any Trading System will have Long Losing Periods
Forget the statement you can make a regular income - you can't.
Even the best traders have losing periods that can last for many weeks or months. This doesn't mean you can't win long term you can but beware, you will face long periods of losses.
Fact 5: Most Vendors are NOT Successful forex traders
If they were, they wouldn't be selling you a forex robot for $100 and claiming it makes $100,000, they would be to busy making money to bother you.
Ever wonder why everyone in the world isn't trading?
Well the answer is - only the naïve or greedy trader buys a forex robot thinking he can get rich for $100.00 or so.
Fact 6: The Minority that Win
Have real track records and cost a few thousand dollars but they are a great investment and can make the investment in them back many times over but be aware, even the best ones have periods of losses ( normally 20 - 50%) and these can last for weeks, so you need discipline to trade them.
You can win with a forex robot but it's a fact that most sold will simply destroy your equity and do it quickly. So cut through the hype, be realistic and go for one which has at least been proven in the real world of trading and is not just made up in hindsight!
