Inflation levels and trends: Typically a currency will lose value if there is a high level of inflation in the country or if inflation levels are perceived to be rising. This is because inflation erodes purchasing power, thus demand, for that particular currency. However, a currency may sometimes strengthen when inflation rises because of expectations that the central bank will raise short-term interest rates to combat rising inflation.
There are actually three ways that institutions, corporations and individuals trade forex: the spot market, the forwards market and the futures market. The forex trading in the spot market always has been the largest market because it is the "underlying" real asset that the forwards and futures markets are based on. In the past, the futures market was the most popular venue for traders because it was available to individual investors for a longer period of time. However, with the advent of electronic trading and numerous forex brokers, the spot market has witnessed a huge surge in activity and now surpasses the futures market as the preferred trading market for individual investors and speculators. When people refer to the forex market, they usually are referring to the spot market. The forwards and futures markets tend to be more popular with companies that need to hedge their foreign exchange risks out to a specific date in the future.
The forex market is available for trading 24 hours a day, five and one-half days per week. The Forex Market Time Converter displays "Open" or "Closed" in the Status column to indicate the current state of each global Market Center. However, just because you can trade the market any time of the day or night doesn't necessarily mean that you should. Most successful day traders understand that more trades are successful if conducted when market activity is high and that it is best to avoid times when trading is light.
OANDA (Canada) Corporation ULC accounts are available to anyone with a Canadian bank account. OANDA (Canada) Corporation ULC is regulated by the Investment Industry Regulatory Organization of Canada (IIROC), which includes IIROC's online advisor check database (IIROC AdvisorReport), and customer accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request or at www.cipf.ca.
Another possible source of confusion is that GMT is always just that, summer, winter and fall. Eastern time, however, comes in two flavors: Eastern Standard Time (EST) and Eastern Daylight Time. Since the agreed-upon reference time worldwide is actually GMT, which has no Greenwich Mean Daylight Savings Time, this means that a New York trader who chooses to reference Eastern time rather than GMT, must keep in mind that during Daylight Savings Time in New York, the trading hours shift by an hour because the GMT reference time, needless to say, does not shift.
The optimal time to trade the forex (Foreign Exchange) market is when it's at its most active levels, when trading spreads (the differences between bid prices and the ask prices) tend to narrow. In these situations, less money goes towards the market makers who facilitate currency trades, leaving more money for the buying and selling investors to personally pocket.
High Risk Investment Notice: Trading Forex/CFDs on margin carries a high level of risk and may not be suitable for all investors as you could sustain losses in excess of deposits. The products are intended for retail, professional and eligible counterparty clients. For clients who maintain account(s) with Forex Capital Markets Limited ("FXCM LTD"), retail clients could sustain a total loss of deposited funds but are not subject to subsequent payment obligations beyond the deposited funds and professional clients could sustain losses in excess of deposits. Prior to trading any products offered by FXCM LTD, inclusive of all EU branches, FXCM Australia Pty. Limited, FXCM South Africa (PTY) Ltd, any affiliates of aforementioned firms, or other firms within the FXCM group of companies [collectively the "FXCM Group"], carefully consider your financial situation and experience level. If you decide to trade products offered by FXCM Australia Pty. Limited ("FXCM AU") (AFSL 309763), you must read and understand the Financial Services Guide, Product Disclosure Statement, and Terms of Business. The FXCM Group may provide general commentary which is not intended as investment advice and must not be construed as such. Seek advice from a separate financial advisor. The FXCM Group assumes no liability for errors, inaccuracies or omissions; does not warrant the accuracy, completeness of information, text, graphics, links or other items contained within these materials. Read and understand the Terms and Conditions on the FXCM Group's websites prior to taking further action.
Historically, different international monetary systems have emphasized different policy mixes. For instance, the Bretton Woods system emphasized the first two at the expense of free capital movement. The collapse of the system destroyed the stability and predictability of the currency markets. The resultant large fluctuations meant a rise in exchange rate risk (as well as in profit opportunities). Governments now face numerous challenges that are often captured under the term globalization or capital mobility: the move to floating exchange rates, the political liberalization of capital controls, and technological and financial innovation.

U.S. President Richard Nixon’s nullification of the Bretton Woods Accord in 1971 effectively ended the fixed price peg of the US Dollar — and by extension many other world currencies — to gold. The US Dollar officially became a floating fiat currency and was adopted as a reserve currency by many foreign nations, who continue to use it as a reserve currency today.
In the contemporary international monetary system, floating exchange rates are the norm. However, different governments pursue a variety of alternative policy mixes or attempt to minimize exchange rate fluctuations through different strategies. For example, the United States displayed a preference for ad hoc international coordination, such as the Plaza Agreement in 1985 and the Louvre Accord in 1987, to intervene and manage the price of the dollar. Europe responded by forging ahead with a regional monetary union based on the desire to eliminate exchange rate risk, whereas many developing governments with smaller economies chose the route of “dollarization”—that is, either fixing to or choosing to have the dollar as their currency.
Some commonly traded forex pairs (known as ‘major’ pairs) are EUR/USD, USD/JPY and EUR/GBP, but it is also possible to trade many minor currencies (also known as ‘exotics’) such as the Mexican peso (MXN), the Polish zloty (PLN) or the Norwegian krone (NOK). As these currencies are not so frequently traded the market is less liquid and so the trading spread may be wider.

After you have opened an account, whether it be a demo or live account, you will need to download MetaTrader; a special program for trading on the Forex market. In the terminal, you can keep track of market quotes, make trades by opening and closing positions, and stay up to date with financial news. The terminal is available on PC as well as on mobile devices.


High Risk Investment Notice: Trading Forex/CFD's on margin carries a high level of risk and may not be suitable for all investors as you could sustain losses in excess of deposits. The products are intended for retail, professional and eligible counterparty clients. For clients who maintain account(s) with Forex Capital Markets Limited (“FXCM LTD”), retail clients could sustain a total loss of deposited funds but are not subject to subsequent payment obligations beyond the deposited funds and professional clients could sustain losses in excess of deposits. Prior to trading any products offered by FXCM LTD, inclusive of all EU branches, FXCM Australia Pty. Limited, FXCM South Africa (PTY) Ltd, any affiliates of aforementioned firms, or other firms within the FXCM group of companies [collectively the "FXCM Group"], carefully consider your financial situation and experience level. If you decide to trade products offered by FXCM Australia Pty. Limited ("FXCM AU") (AFSL 309763), you must read and understand the Financial Services Guide, Product Disclosure Statement and Terms of Business. Our Forex/CFD prices are set by FXCM, are not made on an Exchange and are not governed under the Financial Advisory and Intermediary Services Act. The FXCM Group may provide general commentary which is not intended as investment advice and must not be construed as such. Seek advice from a separate financial advisor. The FXCM Group assumes no liability for errors, inaccuracies or omissions; does not warrant the accuracy, completeness of information, text, graphics, links or other items contained within these materials. Read and understand the Terms and Conditions on the FXCM Group’s websites prior to taking further action.
During the 15th century, the Medici family were required to open banks at foreign locations in order to exchange currencies to act on behalf of textile merchants.[10][11] To facilitate trade, the bank created the nostro (from Italian, this translates to "ours") account book which contained two columned entries showing amounts of foreign and local currencies; information pertaining to the keeping of an account with a foreign bank.[12][13][14][15] During the 17th (or 18th) century, Amsterdam maintained an active Forex market.[16] In 1704, foreign exchange took place between agents acting in the interests of the Kingdom of England and the County of Holland.[17]

Being capable of identifying trends is one of the core skills a Forex trader should possess, as it can prove to be highly useful in making any Forex market prediction. The trend is the general direction of a market or an asset price. Trends may vary in length, from short to intermediate, or to long term. Being able to identify a trend can prove to be highly profitable, and the reason is that you will be able to trade with the trend.
For trading purposes, the first currency listed in the pair is always the directional currency on a forex price chart. If you pull up a chart of the EUR/USD, and the price is moving higher, it means the EUR is moving higher relative to the USD. If the price on the chart is falling, then the EUR is declining in value relative to the USD. The attached chart shows this. 
A system of free-floating currencies eventually materialized and is the modern international system of currencies that has allowed the forex market to flourish into the behemoth that it has become. With no stable price mechanism (i.e., gold), national currencies consistently fluctuate in value relative to each other, creating ideal opportunities for major market participants to profit and hedge risk on the spread between currencies.
Foreign Exchange trading, also known as Forex or FX trading, has gained enormous popularity in recent years among layman individuals due to the growth of online brokers and the technological development of online trading platforms. With high liquidity, non-stop opening hours 5 days a week, and great opportunities, it is no wonder that the forex market is the world’s most traded market with a daily trading volume of $5 trillion USD.
Forex trading scams are a concern for even the savviest investor. Foreign exchange fraud has been on a rise for the best couple decades, leading the Commodities Futures Trading Commision and other agencies to deploy task forces analyzing and curtailing schemes. The ingenuity of fraudulent schemes, whether they’re based on phony software or creating fake accounts, increases, but their telltale signs remain largely the same. Steer clear of forex brokerages promising sure wins, fast results, or secret formulas for success. The market has proved time and again that there are no shortcuts. Scammers bank on the human propensity to believe otherwise.
Forex trading as it relates to retail traders (like you and I) is the speculation on the price of one currency against another. For example, if you think the euro is going to rise against the U.S. dollar, you can buy the EURUSD currency pair low and then (hopefully) sell it at a higher price to make a profit. Of course, if you buy the euro against the dollar (EURUSD), and the U.S. dollar strengthens, you will then be in a losing position. So, it’s important to be aware of the risk involved in trading Forex, and not only the reward.
Flights to quality: Unsettling international events can lead to a "flight-to-quality", a type of capital flight whereby investors move their assets to a perceived "safe haven". There will be a greater demand, thus a higher price, for currencies perceived as stronger over their relatively weaker counterparts. The US dollar, Swiss franc and gold have been traditional safe havens during times of political or economic uncertainty.[76]
Investors – Investment firms who manage large portfolios for their clients use the Fx market to facilitate transactions in foreign securities. For example, an investment manager controlling an international equity portfolio needs to use the Forex market to purchase and sell several currency pairs in order to pay for foreign securities they want to purchase.
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None of the models developed so far succeed to explain exchange rates and volatility in the longer time frames. For shorter time frames (less than a few days), algorithms can be devised to predict prices. It is understood from the above models that many macroeconomic factors affect the exchange rates and in the end currency prices are a result of dual forces of demand and supply. The world's currency markets can be viewed as a huge melting pot: in a large and ever-changing mix of current events, supply and demand factors are constantly shifting, and the price of one currency in relation to another shifts accordingly. No other market encompasses (and distills) as much of what is going on in the world at any given time as foreign exchange.[74]
Some commonly traded forex pairs (known as ‘major’ pairs) are EUR/USD, USD/JPY and EUR/GBP, but it is also possible to trade many minor currencies (also known as ‘exotics’) such as the Mexican peso (MXN), the Polish zloty (PLN) or the Norwegian krone (NOK). As these currencies are not so frequently traded the market is less liquid and so the trading spread may be wider.

USDJPY is approaching our first resistance at 112.16 (78.6% Fibonacci retracement, 61.8% Fibonacci extension, horizontal overlap resistance) where a strong drop might occur below this level pushing price down to our major support at 111.38 (61.8% Fibonacci retracement). Stochastic (89,5,3) is also approaching resistance and we might see a corresponding drop in...
Ready to learn Forex? The pros at Online Trading Academy are here to help! The foreign exchange market (also known as forex or FX) is one of the most exciting, fast-paced markets in the financial world. Though historically, forex has been the domain of large institutions, central banks, and high wealth individuals, the growth of the Internet has allowed the average individual to become involved with and profit from online currency trading.
Investors should stick to the major and minor pairs in the beginning. This is because it will be easier to find trades, and lower spreads, making scalping viable. Exotic pairs, however, have much more illiquidity and higher spreads. In fact, because they are riskier, you can make serious cash with exotic pairs, just be prepared to lose big in a single session too.
An important part of the foreign exchange market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators, and their trades often have a little short-term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational corporations (MNCs) can have an unpredictable impact when very large positions are covered due to exposures that are not widely known by other market participants.

One of the most unique features of the forex market is that it is comprised of a global network of financial centers that transact 24 hours a day, closing only on the weekends. As one major forex hub closes, another hub in a different part of the world remains open for business. This increases the liquidity available in currency markets, which adds to its appeal as the largest asset class available to investors.


In this case you are right and the spread for EUR/GBP falls to 0.8312-0.8313. You decide to buy back your €10,000 at the offer price of 0.8313, a cost of £8313. The cost of buying back the euros is £111 less than you originally sold the euros for, so this is your profit on the transaction. Again your profit is determined in the second currency of the forex pair.
The increasingly asymmetric relationship between the currency markets and national governments represents a classic autonomy problem. The “trilemma” of economic policy options available to governments are laid out by the Mundell-Fleming model. The model shows that governments have to choose two of the following three policy aims: (1) domestic monetary autonomy (the ability to control the money supply and set interest rates and thus control growth); (2) exchange rate stability (the ability to reduce uncertainty through a fixed, pegged, or managed regime); and (3) capital mobility (allowing investment to move in and out of the country).
In forex, currencies are quoted in pairs. Let’s take the most popular currency pair as an example, EUR/USD. The first currency (Euro in this case) is called the base currency and the second (USD) is called the quote currency. When you trade a pair you are speculating on whether the base currency (EUR) will strengthen or weaken against the quote currency (USD).

The foreign exchange market may be left unregulated by governments, with EXCHANGE RATES between currencies being determined by the free interplay of the forces of demand and supply (see FLOATING EXCHANGE RATE SYSTEM), or they may be subjected to support-buying and selling by countries’ CENTRAL BANKS in order to fix them at particular rates. See FIXED EXCHANGE RATE SYSTEM, TOBIN TAX.
For high volume traders, FOREX.com offers an Active Trader program with five tiers of pricing. Level one starts with typical spreads of 1.2 pips on the EUR/USD for traders who have a balance of least $25,000. Spreads are further reduced with each subsequent level as traders surpass specific month-to-date (MTD) trading volume thresholds. For example, level five brings spreads as low as 0.84 pips on a pair for traders who reach higher than $500 million in MTD volume.

a MARKET engaged in the buying and selling of FOREIGN CURRENCIES. Such a market is required because each country involved in INTERNATIONAL TRADE and investment has its own domestic currency and this needs to be exchanged for other currencies in order to finance trade and capital transactions. This function is undertaken by a network of private foreign exchange dealers and a country's monetary authorities acting through its central banks.
FXCM Markets is not subject to the regulatory oversight that governs other FXCM entities, which includes but is not limited to Financial Conduct Authority, and Australia Securities and Investment Commission. FXCM Markets is not intended to be used by residents of: the United States, Canada, European Union, Japan, Hong Kong, or Australia. FXCM Markets is committed to maintaining the highest standards of ethical behaviour and professionalism as well as a high level of trust and confidence, all of which are pillars of FXCM's corporate culture. FXCM has earned a reputation for fairness, honesty, and integrity, and considers this to be our most valuable corporate asset. We recognize that our reputation hinges on the adherence of our employees to the highest standards of ethical behaviour and professionalism in the performance of their duties, without which our history of accomplishments would not have been possible. For more information please contact us.
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