Forex Market Trading – Understanding the Forex Market
Forex market trading is a derivative of the foreign exchange. The foreign exchange market now known as the forex market or fx has not been around for many years. It originated in the early 1970’s when the United States stopped using the gold standard. When the gold standard was no longer in use the other currencies went out of control. Prices began to fluctuate with out any forms of control. When this occurred banks again took the opportunity to buy currency low and the later sell it high. This was the creation of the Forex Market. Continue reading
TYING INTEREST RATES TO THE GOLD-OIL RATIO
Commodity prices play a major role financial markets globally and impact the world economies in a significant way. Record prices in agricultural commodities, energy and metals have brought about a new aggregate demand element that enriches exporting countries’ revenues and casts a pall on trade balance in importing countries. Gold and oil prices have made records and left forecasters challenged because of the unprecedented levels that these commodities attain. As opposed to looking at these two commodities separately, an examination of their interrelationship can provide a valuable overview of the global economy, and the economy of the US in particular. Continue reading
Big Buffett bet
In 2002 Buffett made a very public $12 billion bet against the dollar. He raised the amount to $20 billion as of January 2005, but cut back to $16.5 billion in June 2005 after losing nearly $1 billion in the first half. He closed the account in August 2008. Since Buffett made the forex trades in the name of his publicly traded company, Berkshire Hathaway, forex gains and losses were reported quarterly. Continue reading
Yield curves are snapshots of bonds yield with similar asset class and credit quality, the review ranges from a month’s maturities to about 30 years. Yield to maturity, unlike coupon interest rates, is used in the measurement of the total return received by investors as a result of holding bonds up to maturity without the consideration of whether it will pay coupon rates or not. Yield curves are almost without business risk since they are used in the measurements of bonds that are issued by national governments. Governments of countries that have robust bond markets, such as the US, usually raise funds via bond issuing with different durations to other national governments and banks. The banks then sell the bonds to pension funds, individual and institutional investors, hedge funds and other banks. Just like other IOU, the bond will promise to pay a constant stated interest rate all through the bond’s life, and then followed by a full principal once it matures. Continue reading
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Currency trading is a very involved process requiring in-depth analysis of numerous factors and strategies that influence the market conditions. To help a trader through the jungle of tactics and management techniques, Forex tools like a broker account, trading charts, and MT4 EA are employed.
The MT4 EA is one of the best tools that a trader can employ. It will help the user who is skilled as a trader and the novice alike to develop and fine tune skills in currency speculation. The Expert Advisors give the user an overview of the functioning of the market without having to leave the house, as opposed to the days gone by when one had to drag themselves to the trading exchange floor. A good MT4 EA should provide the user with the latest market progress, and analysis of data from the many brokerage houses and financial institutes. It should also help the user organize strategies of investment, develop goals, and be capable of maintaining accounts of several different currencies. Finally, it should be able to provide updates of currency quotes in real-time and be able to store Continue reading
Using VIX in Exposing Complacency
While much has been said about the efficacy of the VIX to expose rising fear in the market, the index also deserves at least the same amount of ink spilled for its ability to expose rising risk appetite, sometimes also known as rising complacency. The chart illustrates how the most prolonged periods of relatively low volatility coincided with a phase of rising equities, characterized by rising bullishness and heightened investor confidence in the stock market. These phases are prominently identifiable in August 1998, January 1999 through February 2000, and Continue reading
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Today, in the market there are many automated tools available which makes the trading easier, faster and more importantly the deals are carried out by keeping into account the strategies formulated by the experts from the all over the world. While some forex tools are really good and stand up to the expectations, some are not as good as they claim to be.
So, you should be careful in purchasing these forex tools, as the sales people who make huge claims would rather be making money using the tool than trying to sell it. An underperforming tool can not only incur you loses but also diminishes the possibility of future earnings through the Forex market. Continue reading