| ost people consider penny stocks to be a poor investment. I, on the other hand, think that investing in a penny stock before that company becomes profitable company is the best way to invest, because you can make a lot more money with penny stocks than would ever be possible with blue-chip stocks. I will now outline for you what you need to know about penny stocks and how to find the best one in which to invest. Penny stocks are defined differently depending on who you talk to. Stockbrokers define them as any stock that trades below $5 per share. Regulatory agencies sometimes classify them as a stock with a price below $2. But, generally speaking, a penny stock is any low-priced security that trades on one of two exchanges; the Pink Sheets or the OTC Bulletin Board. The Pink Sheets are an exchange where most startup companies first get listed. There are no listing requirements to be traded on this exchange. A company does not have to have any sales, nor does it have to reveal how many shares outstanding it has to qualify for the Pink Sheets. The reason why a company tries to get listed on the Pink Sheets, even though their stock will not go up in price because they have no sales to speak of, is because it gives their company more substance and credibility; it is typically easier to attract additional capital, obtain financing, and execute contracts and agreements if a company is publicly traded, even if it is on the Pink Sheets. Also, it is easier to get transferred from the Pink Sheets to one of the larger exchanges than it is to go from being a private company to hopping directly on to one of the major exchanges, such as the NASDAQ or NYSE. Companies listed on the Pink Sheets trade as ridiculously low as $0.00001 per share, all the way up to $500 per share and sometimes beyond. Foreign companies often have some of their shares sold in the United States by listing them on the Pink Sheets. The OTC (Over-The-Counter) Bulletin Board is similar to the Pink Sheets. This exchange consists of relatively young companies either with no sales or a small amount of sales. Companies listed on it are sometimes fully reporting (meaning that they reveal how many shares they have outstanding and what their balance sheet looks like). Often, companies go from the Pink Sheets to the Bulletin Board once they are ready to become fully or semi-reporting. Most publicly traded companies that are now listed on one of the major exchanges (NASADAQ, AMEX, NYSE), at one time or another, were penny stocks listed on the Pink Sheets or Bulletin Board. Rarely does a company go from being private directly to one of the 3 major exchanges. Google is a rare example of a company that was able to do that, because they were so successful so quickly. But, most companies have to pay their dues and edge their way up from the penny stock exchanges to the bigger ones. So, investing in penny stocks can be an excellent investment because some of these young companies will one day be worth a fortune. The hard part is finding the right company to invest in, because for every successful startup company, there is also one that fails within the first year or two. To find the right company, there are a few things you need to look for. Number one, you need to do some research and try to find out how many shares the company has in its float. The float is the number of shares that are currently being traded. Companies listed on the Pink Sheets usually do not officially report this number to the public, but with a little research, you can usually find out. It is usually contained in articles written about the company, or in TV or radio interviews with company officials that are sometimes archived on certain websites. You can also look for the information on message boards or forums where stock traders chat with each other. Simply do a search on Google and read every article ever written about the company, and you will likely find out about their float. This is important because you do not want to invest in a company that already has something like 500 million shares in its float. Companies with this kind of share count are likely having problems moving forward, so they have issued more and more shares to raise money just to stay alive. You want to look for companies that have approximately 5 to 100 million shares in their float. Other things that you should look for in a new company are barriers to entry, patents, and consumer demand. Here are the questions you need to ask yourself when analyzing the probability that a company will be successful: 1) Barriers to Entry: Are there are obstacles that will make it difficult for the company to sell its products or services? 2) Patents: Is the product that the company is going to sell patented? A patent will prevent other companies from producing the exact same product. 3) Consumer Demand: Will there be a demand for what the company is selling? Sometimes a company has a great new invention or an exciting technology, but if it is not something practical that consumers are going to want or need, then it does not matter how great it is. Try to set aside some money for investing in penny stocks and start while you are still young. The earlier you get started, the more money you can make in the long run. Just make sure you do your homework before you invest and you should do extremely well. |
| Author Resource:- Jim Pretin is the owner of http://www.forms4free.com, a service that helps programmers make an HTML form |
| Article From Stock Options Forex Futures Trading & Investing Directory |
| |
jeudi 6 décembre 2007
Penny Stocks Can Be Lucrative By:-Jim Pretin
Stock Options Forex Futures Trading & Investing Directory
t takes some time to learn my method of trading because it's based on tape reading and getting a "feel" for the market. This is *not* about a fast,easy formula to "get rich quick" while you sweat out every trade. Instead, this is about developing confidence and trading consistently without fear and without big draw downs.
Here is my 10 Step Approach to Learning My Style of Trading:
1. Practice exiting trades at break-even, using a one-tick target, a two or three tick soft stop (mental stop) and a 1.5 point hard stop. Never *allow* the market hit your hard stop. Exit by moving your target toward your hard stop, not by moving your hard stop towards your target. With time, all of this must become a reflex. You won't always be able to keep your losses down to 2 ticks, but only on rare occasions should you find yourself letting the market hit your hard stop. ("Rarely" means only about once every 50-100 trades after you get the hang of it.)
Even though your entries won't be good enough in the beginning to make a profit trading these tight soft stops, your entries will gradually improve until you turn the corner and become profitable.
Learn exits and entries separately. Don't let the one influence the other.
Taking losses this way takes dedication and discipline, so stick with it. It's the key to confident trading. If you never take large losses (and rarely medium size ones), the fear of loss pretty much goes away, and your confidence grows. Especially after your entries improve enough to support a "scalping" type exit strategy.
2. Every trade *in all market conditions* begins as a scalp. Let me clarify this: if you're in a choppy market and you're looking to get small gains, like a point or so, manage your initial hard and soft stops *exactly* the same way you would in a quick trend or any other type of market. That means keeping losses as close to 2 ticks as possible, taking lots of break even trades and exiting every time the market doesn't give you *instant gratification* (within a minute or so).
No matter what the market is doing, you must demand that it moves in your favor right after you enter, otherwise you get out as close to break even as possible. This means you'll be closing a lot of trades near break-even within the first minute. This is the foundation of learning to trade for consistent gains.
3. Don't worry about the commissions on break-even trades. If you do, you'll hold on to losing positions, begging them to turn around for you. This is called *hoping.* In this business, this type of *hoping* is the kiss of death. Your money-making trades must move your way in the first minute or less. When trades don't act right in the first minute, most of them will hit your hard stops.
So don't get hung up on the fact that your broker loves you. Who cares if he/she makes a living?
Your concern is *limiting losses*. I care more about this than anything else in trading. (Well-timed entries make my tight soft stops possible, so they're almost as important as the exits.)
4. Practice your entries until your timing is so good that you can *reasonably expect* the market to go your way immediately, before it goes more than 2 ticks against you. This is not easy at first, but if you stick with it, you'll get it.
5. Practice fading the emotional extremes on your entries. (Fading means entering in the opposite direction of the market's last move.) When an extreme NYSE-Tick (often above 1000 or below -1000) occurs at the same time the market accelerates into a support or resistance area, look for a price stall or reversal and fade the move. Fade the emotion.
6. Rarely, if ever, *chase* the market on your entries. Wait for a pullback to get onboard a trend.
I favor shorts over longs... I can get out of a short position quicker than I can get out of a long position. I don't know why. I like to say that I "see gravity better than helium." In the rare strong-trending markets where I may chase an entry, it's going to be a down trend, not an uptrend. I don't trust up trends enough to chase them. Maybe it's just a personal quirk and maybe not. I honestly don't know.
But it's interesting to note that most (not all) professional traders I've met are Bears and prefer short positions over longs. You should give it some thought and find out which direction works better for you. Are your losses bigger on shorts or longs? Specialize in one direction and trade the other direction only when things are looking real good.
7. Never let a gain turn into a loss. This will mean getting out of most trades a little (or a lot) too soon. You just have to live with it. Swing for home runs (greed) will ruin your trading. There is no mechanical formula that I know of,(such as, "move your stop to break even after you get 3 ticks gain") that will work. You have to develop a feel for how the market is acting at the moment, and use your feel to reduce your target or advance your hard stop. This comes with experience.
8. Develop a feel for the big picture movements of the market, not just the intraday action. Use the end-of-day market internals to analyze the market's mood and develop a daily bias.
9. Practice does *not* make perfect. Only *perfect practice* makes perfect. I learned this in my younger years, pursuing a professional baseball career. Perfect practice will keep your losses smaller than your gains in the trading business.
There are a lot of things involved in perfect practice. When you get tired, or when the phone rings, or whatnot, *don't trade*. Always, *always* exit trades exactly the way I've outlined above on every trade in every market condition. Always *wait* for your pitch, the well-timed setup for entering. Don't practice sloppy entries just because you're bored. Only perfect practice will help you. Anything else just amounts to practicing bad habits.
10. Get a mentor. I traded for 6 years before I learned to keep my losses small. My trading turned around immediately after I met my mentor and talked to him on the phone for one week. Is there any serious profession that you can learn without a mentor? Maybe there is, but I don't know of any. It's certainly not trading. Author Resource:- Mike Reed is author of TradeStalker's RBI Trader's Updates. Mike has been trading the Market for 25 years. He offers an unlimited free trial of his nightly TradeStalker RBI Trader's Updates. http://www.TradeStalker.com
Here is my 10 Step Approach to Learning My Style of Trading:
1. Practice exiting trades at break-even, using a one-tick target, a two or three tick soft stop (mental stop) and a 1.5 point hard stop. Never *allow* the market hit your hard stop. Exit by moving your target toward your hard stop, not by moving your hard stop towards your target. With time, all of this must become a reflex. You won't always be able to keep your losses down to 2 ticks, but only on rare occasions should you find yourself letting the market hit your hard stop. ("Rarely" means only about once every 50-100 trades after you get the hang of it.)
Even though your entries won't be good enough in the beginning to make a profit trading these tight soft stops, your entries will gradually improve until you turn the corner and become profitable.
Learn exits and entries separately. Don't let the one influence the other.
Taking losses this way takes dedication and discipline, so stick with it. It's the key to confident trading. If you never take large losses (and rarely medium size ones), the fear of loss pretty much goes away, and your confidence grows. Especially after your entries improve enough to support a "scalping" type exit strategy.
2. Every trade *in all market conditions* begins as a scalp. Let me clarify this: if you're in a choppy market and you're looking to get small gains, like a point or so, manage your initial hard and soft stops *exactly* the same way you would in a quick trend or any other type of market. That means keeping losses as close to 2 ticks as possible, taking lots of break even trades and exiting every time the market doesn't give you *instant gratification* (within a minute or so).
No matter what the market is doing, you must demand that it moves in your favor right after you enter, otherwise you get out as close to break even as possible. This means you'll be closing a lot of trades near break-even within the first minute. This is the foundation of learning to trade for consistent gains.
3. Don't worry about the commissions on break-even trades. If you do, you'll hold on to losing positions, begging them to turn around for you. This is called *hoping.* In this business, this type of *hoping* is the kiss of death. Your money-making trades must move your way in the first minute or less. When trades don't act right in the first minute, most of them will hit your hard stops.
So don't get hung up on the fact that your broker loves you. Who cares if he/she makes a living?
Your concern is *limiting losses*. I care more about this than anything else in trading. (Well-timed entries make my tight soft stops possible, so they're almost as important as the exits.)
4. Practice your entries until your timing is so good that you can *reasonably expect* the market to go your way immediately, before it goes more than 2 ticks against you. This is not easy at first, but if you stick with it, you'll get it.
5. Practice fading the emotional extremes on your entries. (Fading means entering in the opposite direction of the market's last move.) When an extreme NYSE-Tick (often above 1000 or below -1000) occurs at the same time the market accelerates into a support or resistance area, look for a price stall or reversal and fade the move. Fade the emotion.
6. Rarely, if ever, *chase* the market on your entries. Wait for a pullback to get onboard a trend.
I favor shorts over longs... I can get out of a short position quicker than I can get out of a long position. I don't know why. I like to say that I "see gravity better than helium." In the rare strong-trending markets where I may chase an entry, it's going to be a down trend, not an uptrend. I don't trust up trends enough to chase them. Maybe it's just a personal quirk and maybe not. I honestly don't know.
But it's interesting to note that most (not all) professional traders I've met are Bears and prefer short positions over longs. You should give it some thought and find out which direction works better for you. Are your losses bigger on shorts or longs? Specialize in one direction and trade the other direction only when things are looking real good.
7. Never let a gain turn into a loss. This will mean getting out of most trades a little (or a lot) too soon. You just have to live with it. Swing for home runs (greed) will ruin your trading. There is no mechanical formula that I know of,(such as, "move your stop to break even after you get 3 ticks gain") that will work. You have to develop a feel for how the market is acting at the moment, and use your feel to reduce your target or advance your hard stop. This comes with experience.
8. Develop a feel for the big picture movements of the market, not just the intraday action. Use the end-of-day market internals to analyze the market's mood and develop a daily bias.
9. Practice does *not* make perfect. Only *perfect practice* makes perfect. I learned this in my younger years, pursuing a professional baseball career. Perfect practice will keep your losses smaller than your gains in the trading business.
There are a lot of things involved in perfect practice. When you get tired, or when the phone rings, or whatnot, *don't trade*. Always, *always* exit trades exactly the way I've outlined above on every trade in every market condition. Always *wait* for your pitch, the well-timed setup for entering. Don't practice sloppy entries just because you're bored. Only perfect practice will help you. Anything else just amounts to practicing bad habits.
10. Get a mentor. I traded for 6 years before I learned to keep my losses small. My trading turned around immediately after I met my mentor and talked to him on the phone for one week. Is there any serious profession that you can learn without a mentor? Maybe there is, but I don't know of any. It's certainly not trading. Author Resource:- Mike Reed is author of TradeStalker's RBI Trader's Updates. Mike has been trading the Market for 25 years. He offers an unlimited free trial of his nightly TradeStalker RBI Trader's Updates. http://www.TradeStalker.com
How Does Forex Currency Trading Work
Foreign exchange trading, or often referred to as Forex (FX) currency trading, is simply the trading of foreign currencies in a forex market. This form of trading was initiated by the event of the Breton Woods Agreement in 1944. This agreement was an effort to keep cash from draining out of the war-ravaged Europe. The U.S. Dollar served as the basis for currency values, which was pegged to the price of gold.
When this agreement had collapsed, the modern era of foreign exchange then emerged in 1971. By then the U.S Dollar was no longer convertible to gold, signaling an increase in currency market volatility and trading opportunities, however, during the collapse of the Smithsonian and European Joint Float agreements in 1973, the true free-floating currency exchange began to transpire. With the aid of the computer technology, the reach of the exchange marketplace was extended. Values of major word currencies today have become independent of each other.
There are four known currency pairs that dominate the percentage of trades. This are identified when buying and selling in the forex currency trading system market. These four currency pairs are the Euro vs. U.S. Dollar, the U.S. Dollar vs. the Japanese Yen, the U.S. Dollar vs. Swiss Franc, and the U.S. Dollar vs. the British Pound.
When investing in currency, the primary goal is to hold a currency that appreciates in value relevant to the other currencies. Here is a simplistic example. If 50 British Pounds were bought for 100 U.S. Dollars, then held the Pounds for one week, considering that in that period the value of Pounds increased in relation to U.S. Dollars, those Pounds could then be converted back into $120 for example.
The forex currency trading is open for trades the whole 24 hours in a day. Compared to the domestic stock markets, the foreign currency trading is always in business since every country from different regions of the globe trade on the FX market. In addition, the other important distinction of the forex currency trading from the domestic stock exchange is that it does not rely on a central body or organization such as the NYSE or NASDAQ to act as middleman. Usually, the trading flows between major banking centers around the world.
Previously, currency trading had very high barriers to entry, giving only large banking and institutional firms the access to the tools and systems required to participate in the forex trading. With the advent of the internet, there came the FX brokers. These forex brokers may be thought of as something similar to an online stock trading account such as etrade. This enables anybody to play the forex trading game by opening an account and buy and sell in quantity. The large minimum transaction size can be met by brokers as these are composed of thousands of investors placing orders through tem.
It may seem easy to start trading forex, however, it is undeniably a complicated and complex market. As it offers a tremendous opportunity for wealth, it is also very easy to lose a whole lot. It is best to first to do research, understand and analyze as much on this matter before investing your hard earned money. Author Resource:- To learn the best forex trading strategies and learn everything about forex currency trading just visit http://www.forex-trading-platform.org
When this agreement had collapsed, the modern era of foreign exchange then emerged in 1971. By then the U.S Dollar was no longer convertible to gold, signaling an increase in currency market volatility and trading opportunities, however, during the collapse of the Smithsonian and European Joint Float agreements in 1973, the true free-floating currency exchange began to transpire. With the aid of the computer technology, the reach of the exchange marketplace was extended. Values of major word currencies today have become independent of each other.
There are four known currency pairs that dominate the percentage of trades. This are identified when buying and selling in the forex currency trading system market. These four currency pairs are the Euro vs. U.S. Dollar, the U.S. Dollar vs. the Japanese Yen, the U.S. Dollar vs. Swiss Franc, and the U.S. Dollar vs. the British Pound.
When investing in currency, the primary goal is to hold a currency that appreciates in value relevant to the other currencies. Here is a simplistic example. If 50 British Pounds were bought for 100 U.S. Dollars, then held the Pounds for one week, considering that in that period the value of Pounds increased in relation to U.S. Dollars, those Pounds could then be converted back into $120 for example.
The forex currency trading is open for trades the whole 24 hours in a day. Compared to the domestic stock markets, the foreign currency trading is always in business since every country from different regions of the globe trade on the FX market. In addition, the other important distinction of the forex currency trading from the domestic stock exchange is that it does not rely on a central body or organization such as the NYSE or NASDAQ to act as middleman. Usually, the trading flows between major banking centers around the world.
Previously, currency trading had very high barriers to entry, giving only large banking and institutional firms the access to the tools and systems required to participate in the forex trading. With the advent of the internet, there came the FX brokers. These forex brokers may be thought of as something similar to an online stock trading account such as etrade. This enables anybody to play the forex trading game by opening an account and buy and sell in quantity. The large minimum transaction size can be met by brokers as these are composed of thousands of investors placing orders through tem.
It may seem easy to start trading forex, however, it is undeniably a complicated and complex market. As it offers a tremendous opportunity for wealth, it is also very easy to lose a whole lot. It is best to first to do research, understand and analyze as much on this matter before investing your hard earned money. Author Resource:- To learn the best forex trading strategies and learn everything about forex currency trading just visit http://www.forex-trading-platform.org
Forex Market Terminology - Understanding The Basics
When you first start trading the Forex market you can become overwhelmed with the amount of information there is to consume.
One of the hardest parts for a new trader is learning the lingo. Some of the terms used in currency exchange are self-explanatory, whereas others are not. In this section I provide brief definitions of some of the most common Forex trading terms.
Spot Deal
A deal taking part between two parties who can deliver a certain amount of different currencies to each other within 2 business days of each other (excluding Canadian dollar where the trade is executed within 1 business day)
Market Order
This is the execution you make when deciding to buy a currency. In other words you see a currency exchange rate quote on screen and you place a ‘market order’ when you click the button to execute the trade.
Entry Orders
This is basically and advance order, you decide at what price you want to buy or sell a currency and you place an ‘entry order’. As soon as the currencies reaches this rate your trade is executed.
Stop-Loss Order
This is a function offered by some brokers which is aimed at reducing your risk, you can decide the maximum and minimum amount of profit or loss you want to exit a trade at. In other words if you decide you are happy to make $1,000 from one trade but don’t want to lose anymore than $1,000 should the trade go the other way you can place this safety net on your trade.
Bid
This is the currency rate that you wish to buy or sell at.
Offer
This is the currency rate you will actually get when buying or selling
Spread
The difference between the bid and offer rates
Pip
This is the last decimal of the exchange rate with the exception of the Japanese Yen where it is the second decimal.
Lot
The amount of units of the base currency when you enter the market.
Margin
The minimum amount of money you need for each lot to trade, for example the margin may be 1 lot for $100 and therefore you would need $300 in your account to trade 3 lots.
Trend
The direction the market is currently moving in.
Long Position
This is used to describe a market in a long-term buy trend
Short PositionThis is used to describe a market in a short-term sell trend
I hope that these helped clear up any uncertainties you had about common Forex terms. If there are any you feel we have missed that should be included feel free to email me at: office@instantforexincome.com
Next we will look at the Forex currency pairs that make up your options when deciding where to invest your trading money. Click on the 'Next' button below to continue.
One of the hardest parts for a new trader is learning the lingo. Some of the terms used in currency exchange are self-explanatory, whereas others are not. In this section I provide brief definitions of some of the most common Forex trading terms.
Spot Deal
A deal taking part between two parties who can deliver a certain amount of different currencies to each other within 2 business days of each other (excluding Canadian dollar where the trade is executed within 1 business day)
Market Order
This is the execution you make when deciding to buy a currency. In other words you see a currency exchange rate quote on screen and you place a ‘market order’ when you click the button to execute the trade.
Entry Orders
This is basically and advance order, you decide at what price you want to buy or sell a currency and you place an ‘entry order’. As soon as the currencies reaches this rate your trade is executed.
Stop-Loss Order
This is a function offered by some brokers which is aimed at reducing your risk, you can decide the maximum and minimum amount of profit or loss you want to exit a trade at. In other words if you decide you are happy to make $1,000 from one trade but don’t want to lose anymore than $1,000 should the trade go the other way you can place this safety net on your trade.
Bid
This is the currency rate that you wish to buy or sell at.
Offer
This is the currency rate you will actually get when buying or selling
Spread
The difference between the bid and offer rates
Pip
This is the last decimal of the exchange rate with the exception of the Japanese Yen where it is the second decimal.
Lot
The amount of units of the base currency when you enter the market.
Margin
The minimum amount of money you need for each lot to trade, for example the margin may be 1 lot for $100 and therefore you would need $300 in your account to trade 3 lots.
Trend
The direction the market is currently moving in.
Long Position
This is used to describe a market in a long-term buy trend
Short PositionThis is used to describe a market in a short-term sell trend
I hope that these helped clear up any uncertainties you had about common Forex terms. If there are any you feel we have missed that should be included feel free to email me at: office@instantforexincome.com
Next we will look at the Forex currency pairs that make up your options when deciding where to invest your trading money. Click on the 'Next' button below to continue.
Choosing The Right Forex Broker
Anyone wishing to start trading Forex online must do so by opening an account with a trustworthy broker. For new traders, the most popular and logical choice is a mini Forex trading account.
The question is what should you look out for when deciding where to deposit your cash?
Firstly, it is important to find a professional and reputable broker.
Unfortunately there are some platforms out there which are anything but professional and you should be wary of any that look like they have been cobbled together by anyone other than a professional organization.
Secondly, you need to decide the minimum amount you want to deposit. A mini account minimum deposit can range from anything from $50 right up to $250.
A low $50 deposit is a great way for you to start trading and learn the ropes. If you have more cash available then you might want to consider a Pro Account which usually offers better features for around a $1,000 deposit. Click here to see which brokers I recommend.
Flexible Forex trading = Profitable Forex Trading
Related to the payment is what forms of depositing is accepted. Avoid those that can only offer you bank transfers or check depositing, you can easily miss out on that profitable trade you have been waiting for simply because your money hasn't cleared. Instead look for a broker that can offer you credit card depositing in an instant for ultimate speed and convenience.
Another key consideration is the type of software the broker offers. The two main ways you can trade online is either via a platform which you download and host on your own computer. This software communicates with the broker when you are connected to the Internet to bring you all the latest buy and sell prices.
The other method of trading is through an online based system where you visit your broker and log-in to their online system. This avoids the lengthy download times and means you can trade in an instant.
Both methods have their advantages and disadvantages although personally I prefer web-based platforms that require no downloading of software.
This is simply because it means you can log in to your trading account no matter where you are in the world and no matter what computer you are using, as long as you have an Internet connection you can trade. A downloaded software can only be traded from the machine upon which the software is installed.
Look for Competitive Pip Spreads and Leverage
Something else you should look at are the spreads charged by brokers. Around 3-5 pips is normal for a mini account but some brokers will increase their pips much higher when major economic news is released.
This is so that they can reap the profits from the increased trading activity. Look for a broker that offers guaranteed fixed spreads to avoid paying through the teeth.
Leverage should also be a consideration of yours. Some brokers will only offer leverages of 50:1 on their mini accounts whereas others will offer as much as 200:1. You should consider the higher the leverage the better and the more chance of bigger profits.
Customer support should also be a main concern when you are choosing which Forex broker to use. Because of the technical nature of Forex trading it is vitally important to choose a broker with trained 24/7 customer support.
One final thing a new trader should read up on before opening an account with a broker is what measures they have in place to stop you losing more money than you can afford to. Some will offer a stop-loss function so you automatically exit a trade at a certian point should things go wrong.
Limit Your Losses and Maximize Your Forex Profits
Some brokers such as ForexYard also offer a no debit guarantee, this means you will never be faced with a negative balance to pay back. If your account ever reaches zero you positions will automatically close so that you are never faced with a bill to pay back a debt. This is an incredibly important feature for the new trader.
Now you know what to look out for with brokers we will take you to our Forex broker reviews on the next page. We have tried some of the top brokers out there and we present our findings along with our recommended broker fo you to use.
The question is what should you look out for when deciding where to deposit your cash?
Firstly, it is important to find a professional and reputable broker.
Unfortunately there are some platforms out there which are anything but professional and you should be wary of any that look like they have been cobbled together by anyone other than a professional organization.
Secondly, you need to decide the minimum amount you want to deposit. A mini account minimum deposit can range from anything from $50 right up to $250.
A low $50 deposit is a great way for you to start trading and learn the ropes. If you have more cash available then you might want to consider a Pro Account which usually offers better features for around a $1,000 deposit. Click here to see which brokers I recommend.
Flexible Forex trading = Profitable Forex Trading
Related to the payment is what forms of depositing is accepted. Avoid those that can only offer you bank transfers or check depositing, you can easily miss out on that profitable trade you have been waiting for simply because your money hasn't cleared. Instead look for a broker that can offer you credit card depositing in an instant for ultimate speed and convenience.
Another key consideration is the type of software the broker offers. The two main ways you can trade online is either via a platform which you download and host on your own computer. This software communicates with the broker when you are connected to the Internet to bring you all the latest buy and sell prices.
The other method of trading is through an online based system where you visit your broker and log-in to their online system. This avoids the lengthy download times and means you can trade in an instant.
Both methods have their advantages and disadvantages although personally I prefer web-based platforms that require no downloading of software.
This is simply because it means you can log in to your trading account no matter where you are in the world and no matter what computer you are using, as long as you have an Internet connection you can trade. A downloaded software can only be traded from the machine upon which the software is installed.
Look for Competitive Pip Spreads and Leverage
Something else you should look at are the spreads charged by brokers. Around 3-5 pips is normal for a mini account but some brokers will increase their pips much higher when major economic news is released.
This is so that they can reap the profits from the increased trading activity. Look for a broker that offers guaranteed fixed spreads to avoid paying through the teeth.
Leverage should also be a consideration of yours. Some brokers will only offer leverages of 50:1 on their mini accounts whereas others will offer as much as 200:1. You should consider the higher the leverage the better and the more chance of bigger profits.
Customer support should also be a main concern when you are choosing which Forex broker to use. Because of the technical nature of Forex trading it is vitally important to choose a broker with trained 24/7 customer support.
One final thing a new trader should read up on before opening an account with a broker is what measures they have in place to stop you losing more money than you can afford to. Some will offer a stop-loss function so you automatically exit a trade at a certian point should things go wrong.
Limit Your Losses and Maximize Your Forex Profits
Some brokers such as ForexYard also offer a no debit guarantee, this means you will never be faced with a negative balance to pay back. If your account ever reaches zero you positions will automatically close so that you are never faced with a bill to pay back a debt. This is an incredibly important feature for the new trader.
Now you know what to look out for with brokers we will take you to our Forex broker reviews on the next page. We have tried some of the top brokers out there and we present our findings along with our recommended broker fo you to use.
Mini Forex Accounts - The Gateway to Low-Deposit Trading
Until recently anyone wishing to trade the Forex market needed thousands of dollars just to open an account. This put the market out of reach for anyone other than large businesses and cash rich individuals.
Nowadays, mostly thanks to the advancement of technology such as the Internet, many Forex brokers are offering mini Forex accounts that can typically be opened and traded with just $100. This has opened up Forex to practically anyone who has an interest in currency trading.
These mini accounts are set to help the foreign exchange become the worlds most popular trading activity. Everyone from students and housewives right up to millionnaire entrepeneurs can now trade the Forex on a mini account and still make large profits.
Of course, Forex Pro accounts still tend to offer more features and higher chances of truly massive profits but these accounts typically need a few thousand dollars to open and so are out of reach for the majority of new traders.
Forex Mini Accounts are Perfect for New Traders
With a Forex mini account you can expect low minimum deposits of as little as $100 which can usually be deposited through bank transfer or Credit Card, sometimes even Debit Cards which is obviously very advantageous.
The idea of a Forex mini account is that it allows a new trader to get started in currency trading with small amounts until they gain the confidence, experience and profits to be able to tackle a professional account and make the really big money.
To help you do this many mini accounts come packaged with a variety of support tools from simple charting right through to personal 1 to 1 tuition. The software of the mini account is usually very easy to use since its main user is the inexperienced trader and there are usually measures in place to help you manage your trading and avoid any significant losses.
A mini Forex account will still offer you good leverages (often up to 200:1) and competitive pip spreads (3-5 is the typical) so you can still make big profits while you learn the fundamentals of trading and work on developing your own Forex strategy.
A mini Forex account is best for those who intend on depositing less than $1,000 and for those who are new to online currency exchange. We always stress that it is important to learn to run before you walk in Forex and for that reason when starting to trade you should ideally start by opening a mini account with a reputable Forex broker.
Nowadays, mostly thanks to the advancement of technology such as the Internet, many Forex brokers are offering mini Forex accounts that can typically be opened and traded with just $100. This has opened up Forex to practically anyone who has an interest in currency trading.
These mini accounts are set to help the foreign exchange become the worlds most popular trading activity. Everyone from students and housewives right up to millionnaire entrepeneurs can now trade the Forex on a mini account and still make large profits.
Of course, Forex Pro accounts still tend to offer more features and higher chances of truly massive profits but these accounts typically need a few thousand dollars to open and so are out of reach for the majority of new traders.
Forex Mini Accounts are Perfect for New Traders
With a Forex mini account you can expect low minimum deposits of as little as $100 which can usually be deposited through bank transfer or Credit Card, sometimes even Debit Cards which is obviously very advantageous.
The idea of a Forex mini account is that it allows a new trader to get started in currency trading with small amounts until they gain the confidence, experience and profits to be able to tackle a professional account and make the really big money.
To help you do this many mini accounts come packaged with a variety of support tools from simple charting right through to personal 1 to 1 tuition. The software of the mini account is usually very easy to use since its main user is the inexperienced trader and there are usually measures in place to help you manage your trading and avoid any significant losses.
A mini Forex account will still offer you good leverages (often up to 200:1) and competitive pip spreads (3-5 is the typical) so you can still make big profits while you learn the fundamentals of trading and work on developing your own Forex strategy.
A mini Forex account is best for those who intend on depositing less than $1,000 and for those who are new to online currency exchange. We always stress that it is important to learn to run before you walk in Forex and for that reason when starting to trade you should ideally start by opening a mini account with a reputable Forex broker.
Forex Trading Offers Huge Earning Potential
Forex currency exchange trading is one of the fastest growing trade markets in the world. It is also the biggest with an estimated 1.8 trillion dollars being exchanged every single day.
With these stats to it's name it should come as no surprise that one of the major reasons for this exponential growth is the fact that Forex trading offers incredible earning potential.
This is also why large multi-national corporations have been investing in foreign exchange for years and more and more individuals are utilizing currency trading to supplement their incomes and some are even living purely off the profits they make.
Incredible Forex Leverage Ratios
So why does Forex trading offer such incredible earning potential? Well firstly the currency exchange market operates through brokers who offer some significant leverage ratios to their traders.
For example, you decide to purchase 10,000 US Dollars against Japanese Yen at 125.00. Next day you sell 10,000 US dollars and buy Yen at 126.00 making a profit of approximately $79. To fund this position you need a deposit of $100 not $10,000 since the rest of the amount is leveraged to you by your Forex broker.
If you were to try and trade without any form of leverage you would make very minimal profits and it would not be worth your time trading.
This is the beauty of Forex trading, any individual trader, no matter what their starting capital, can experience the thrill ride of trading large amounts of currency and making big profits without depositing thousands of dollars.
Massive Earning Potential
Another factor that lends itself favorably to the earning potential of Forex trading is the fact that the market is open 24 hours a day. As one market is closing another is opening, Forex literally follows the sun around the earth - where the sun is shining the Forex is trading! This means you can be making profit 24 hours a day on Forex, particularly if you make use of an automated trading system.
The speed at which things change in Forex is also a major factor behind why currency exchange can be so profitable. Barely a second goes by without currency changing in value.
Unlike stocks are shares where you can be sitting on a trade for month, even years, waiting for the price to move favorably, currencies can make you a substantial profit within minutes or even seconds of you commencing a trade.
There are also no expensive commission fees to pay anyone in Forex. Brokers make their money from the difference between the buy and sell price of a currency. This means you never need to concern yourself with the thought that you will lose some of your profits to your broker - whatever you earn you can keep!
Stop-Loss Functions for Safer Currency Trading
The stop-loss functions of Forex trading platforms will also help you to make huge profits trading currencies. These work by you pre-setting an entry and exit point you are happy to complete a trade at.
For example, you know the figure you want to make from a trade and you also know the most you are willing to lose if things go wrong, so you set this up when you start your trade.
If the value of your trade reaches either of these upper and lower limits you trade will automatically execute. This puts a limit on your losses and ensures that you never lose more than you intend but you always profit as much as you envisage if things go in your favor.
All of these factors and more contribute to making online Forex trading one of the most profitable trading opportunities in the world. Those that get their strategy right are well known to be making millions every year from trading Forex.
If you are willing to put in the time to properly educate yourself and do not try to run before you can walk then you have a fantastic chance at making sums of money you never dreamed possible simply by trading currencies online.
Product of the Month
Easy-Forex
This platform wins my exclusive Product of The Month award for it's outstanding platform which has recently undergone major improvements.
With a low minimum deposit of $50 payable by credit card or bank transfer, fixed spreads of between 3-7 pips, negative balance protection, and a typical leverage of 200:1, you simply wont find a better platform to maximize your Forex earnings.
Click here to read my full review of the Easy-Forex platform
On the next page we will discuss one of the latest features of Forex trading - the mini Forex account which allows traders from all walks of life to get a footing in the foreign exchange and make substantial profits even from small investments.
With these stats to it's name it should come as no surprise that one of the major reasons for this exponential growth is the fact that Forex trading offers incredible earning potential.
This is also why large multi-national corporations have been investing in foreign exchange for years and more and more individuals are utilizing currency trading to supplement their incomes and some are even living purely off the profits they make.
Incredible Forex Leverage Ratios
So why does Forex trading offer such incredible earning potential? Well firstly the currency exchange market operates through brokers who offer some significant leverage ratios to their traders.
For example, you decide to purchase 10,000 US Dollars against Japanese Yen at 125.00. Next day you sell 10,000 US dollars and buy Yen at 126.00 making a profit of approximately $79. To fund this position you need a deposit of $100 not $10,000 since the rest of the amount is leveraged to you by your Forex broker.
If you were to try and trade without any form of leverage you would make very minimal profits and it would not be worth your time trading.
This is the beauty of Forex trading, any individual trader, no matter what their starting capital, can experience the thrill ride of trading large amounts of currency and making big profits without depositing thousands of dollars.
Massive Earning Potential
Another factor that lends itself favorably to the earning potential of Forex trading is the fact that the market is open 24 hours a day. As one market is closing another is opening, Forex literally follows the sun around the earth - where the sun is shining the Forex is trading! This means you can be making profit 24 hours a day on Forex, particularly if you make use of an automated trading system.
The speed at which things change in Forex is also a major factor behind why currency exchange can be so profitable. Barely a second goes by without currency changing in value.
Unlike stocks are shares where you can be sitting on a trade for month, even years, waiting for the price to move favorably, currencies can make you a substantial profit within minutes or even seconds of you commencing a trade.
There are also no expensive commission fees to pay anyone in Forex. Brokers make their money from the difference between the buy and sell price of a currency. This means you never need to concern yourself with the thought that you will lose some of your profits to your broker - whatever you earn you can keep!
Stop-Loss Functions for Safer Currency Trading
The stop-loss functions of Forex trading platforms will also help you to make huge profits trading currencies. These work by you pre-setting an entry and exit point you are happy to complete a trade at.
For example, you know the figure you want to make from a trade and you also know the most you are willing to lose if things go wrong, so you set this up when you start your trade.
If the value of your trade reaches either of these upper and lower limits you trade will automatically execute. This puts a limit on your losses and ensures that you never lose more than you intend but you always profit as much as you envisage if things go in your favor.
All of these factors and more contribute to making online Forex trading one of the most profitable trading opportunities in the world. Those that get their strategy right are well known to be making millions every year from trading Forex.
If you are willing to put in the time to properly educate yourself and do not try to run before you can walk then you have a fantastic chance at making sums of money you never dreamed possible simply by trading currencies online.
Product of the Month
Easy-Forex
This platform wins my exclusive Product of The Month award for it's outstanding platform which has recently undergone major improvements.
With a low minimum deposit of $50 payable by credit card or bank transfer, fixed spreads of between 3-7 pips, negative balance protection, and a typical leverage of 200:1, you simply wont find a better platform to maximize your Forex earnings.
Click here to read my full review of the Easy-Forex platform
On the next page we will discuss one of the latest features of Forex trading - the mini Forex account which allows traders from all walks of life to get a footing in the foreign exchange and make substantial profits even from small investments.
A History of Trading the Forex Market
Forex currency trading has made massive advancements over recent years and is becoming on the Internets most searched for trading opportunities.
Technological advancements have made Forex an opportunity to make money for everyone from small individual speculators to large multi-national companies.
In reality the principles of Forex trade have existed for centuries but it wasn't until 1967 when the idea of a global system of currency exchange first began to be put together.
A college professor named Milton Friedman famously wanted to take a bank loan in Pounds Sterling (feeling that the currency was overpriced against the dollar) and then sell it before buying it back once the price against the dollar had fallen.
This would allow him to repay the bank and pocket a nice profit for himself. His loan application was declined due to the bretton woods agreement that was in place at the time but this set the wheels in motion for worldwide Forex trading.
The Birth of the Foreign Currency Exchange
In 1971 when floating exchange rates began to materialize and the bretton woods agreement was abandoned, the foreign currency exchange market was born.
This advancement was welcomed with open arms by the International companies who had often noticed big profit changes both positive and negative simply based on the value of their native currency against the value of the currencies in the markets in which they traded their day to business activities.
These companies would see fluctuating exchange rates effect their profit and loss accounts, often with millions being made or lost simply on the value of one currency against another.
It was also these companies that were first to spot the huge money making opportunity currency fluctuations offered and these same companies were the first to leap on to the Forex trading bandwagon and attempt to increase their profit margins through brave yet profitable currency exchange decisions.
Online Forex Trading Advances
Of course when Forex first began the Internet was a distant dream and therefore trading was carried out exclusively by the cash rich worldwide organizations.
These were companies who could afford to throw a few million in to the mix in an attempt to make some big money trading currencies.
Trading was carried out over the telephone via several exchange centers all over the world. A trader would monitor global activity and then ring their broker in order to commence or complete a trade order.
The transfer of funds to complete trades was done through bank transfers which often took a few days to go through. This meant that whilst the Forex market offered a fantastic earning opportunity, trading was both time consuming and a hassle.
With the advent and then increasing popularity of the Internet, Forex trading online opened up the doors to millions of people who had never previously had the resources to take part.
Gone are the days of having to phone through your intended trade, Credit and Debit cards are even accepted with some online brokers for depositing funds. Even more recently the Forex market has opened up to individual traders even with very small amounts to invest.
Huge Forex Profits even from Small Investments
Historically, traders would need several thousands of dollars to be able to trade. Thanks to the ever increasing competitive nature of currency trading online this has been reduced so far that an individual can now begin trading a mini Forex account with as little as $25.
With the often huge leverages on offer even such a small amount can produce considerable returns.
Forex trading is forever increasing in popularity due to the many benefits it offers and more and more trading resources becoming available online.
The Internet is a wonderful thing and when you combine it with the magic of Forex trading you suddenly have an amazing and exciting hobby or profession right in front of you.
Click the next button below to read more about the amazing earning potential trading currencies online can offer you no matter what the level of investment is that you have to put forward.
Technological advancements have made Forex an opportunity to make money for everyone from small individual speculators to large multi-national companies.
In reality the principles of Forex trade have existed for centuries but it wasn't until 1967 when the idea of a global system of currency exchange first began to be put together.
A college professor named Milton Friedman famously wanted to take a bank loan in Pounds Sterling (feeling that the currency was overpriced against the dollar) and then sell it before buying it back once the price against the dollar had fallen.
This would allow him to repay the bank and pocket a nice profit for himself. His loan application was declined due to the bretton woods agreement that was in place at the time but this set the wheels in motion for worldwide Forex trading.
The Birth of the Foreign Currency Exchange
In 1971 when floating exchange rates began to materialize and the bretton woods agreement was abandoned, the foreign currency exchange market was born.
This advancement was welcomed with open arms by the International companies who had often noticed big profit changes both positive and negative simply based on the value of their native currency against the value of the currencies in the markets in which they traded their day to business activities.
These companies would see fluctuating exchange rates effect their profit and loss accounts, often with millions being made or lost simply on the value of one currency against another.
It was also these companies that were first to spot the huge money making opportunity currency fluctuations offered and these same companies were the first to leap on to the Forex trading bandwagon and attempt to increase their profit margins through brave yet profitable currency exchange decisions.
Online Forex Trading Advances
Of course when Forex first began the Internet was a distant dream and therefore trading was carried out exclusively by the cash rich worldwide organizations.
These were companies who could afford to throw a few million in to the mix in an attempt to make some big money trading currencies.
Trading was carried out over the telephone via several exchange centers all over the world. A trader would monitor global activity and then ring their broker in order to commence or complete a trade order.
The transfer of funds to complete trades was done through bank transfers which often took a few days to go through. This meant that whilst the Forex market offered a fantastic earning opportunity, trading was both time consuming and a hassle.
With the advent and then increasing popularity of the Internet, Forex trading online opened up the doors to millions of people who had never previously had the resources to take part.
Gone are the days of having to phone through your intended trade, Credit and Debit cards are even accepted with some online brokers for depositing funds. Even more recently the Forex market has opened up to individual traders even with very small amounts to invest.
Huge Forex Profits even from Small Investments
Historically, traders would need several thousands of dollars to be able to trade. Thanks to the ever increasing competitive nature of currency trading online this has been reduced so far that an individual can now begin trading a mini Forex account with as little as $25.
With the often huge leverages on offer even such a small amount can produce considerable returns.
Forex trading is forever increasing in popularity due to the many benefits it offers and more and more trading resources becoming available online.
The Internet is a wonderful thing and when you combine it with the magic of Forex trading you suddenly have an amazing and exciting hobby or profession right in front of you.
Click the next button below to read more about the amazing earning potential trading currencies online can offer you no matter what the level of investment is that you have to put forward.
What's Forex
FOREX (Foreign Exchange Market) - The global currency market of an exchange of certain currency of one country to currency of another country at the coordinated rate for the certain date. FOREX does not have any certain location of trade. It is a huge network where the currency dealers connected among themselves by the means of telecommunications concentrated on all World Financial Centers are working round the clock as a uniform mechanism. The basic participants of the currency market are: commercial banks, currency stock exchanges, the central banks, the firms which are carrying out the foreign trade operations, investment funds, the broker companies, private persons.
The main currencies which are shared on the basic volume of all operations in the FOREX market today are: the euro (EUR), the Japanese yen (JPY), the Swiss franc (CHF) and English pound of sterling (GBP) and US dollar (USD). The daily volume of conversion operations in the world makes about 2 billion US dollars. The turnover for the London market was about 30% of, for the market of the USA - 20%, Germany - 10%. Operations with US dollar make 70 %. About 15 % of turnover at FOREX market today is on a share of electronic brokers. The day time volume of operations of the largest international banks (Deutsche Bank, Barclays Bank, Union Bank of Switzerland, City Bank, Chase Manhattan Bank, Standard Chartered Bank) reaches billions of dollars. The operations of (spot) type or current conversion operations are transactions of sale and purchase of currency. Actual execution (value) of fallowing is carried out for the second working day after the day of the conclusion of transaction. Typical volumes of transactions in interbank trade make 10 million dollars, but due to the system of margin trade. The output in the market is also accessible to the persons having small capital. The brokers, rendering services of margin trade, demand entering of the mortgaging deposit and enable the client to make operations of currency sale and purchase for the sums, of 100 times bigger than the brought deposit. The risk of losses is assigned to the client. The deposit serves as the insurance for the broker. The international currency market has deep centuries-old roots. It has originated more than thousand years B.C. when the first metal money has appeared in Egypt . Money market operations in their present understanding have started to develop in middle Ages. It has been associated with development of international trade and navigation. Italian shroffs were considered as the first speculators with foreign currency. They earned on the currency exchange of the different states.
The currency exchange market has changed at the interstate attitudes development, getting more and more precise outlined. The most significant changes have been brought in the currency market development in XX century. Finding of modern features by the market began in 70th years of 20 centuries when the system of the fixed rates of one currency into another has been removed. After removal of restrictions on fluctuations of currencies the new kind of business based on profit extraction according to conditions of free system of the exchange rates changing. And change of a rate is caused by all possible market conditions and adjusted only by a supply and demand.
The basic stages of the world financial market development in 30th years of XX century. World financial crisis. Economical trading contacts are broken. Times of golden coin standard have gone to the past. In the middle of 30's London becomes the World Financial Center . Great British Pound becomes the base currency for trading operations and forming of currency reserves. And then pound had a slang name "cable" already. That was associated with the factor that transactions were conducted on the telegraph and the information was transferred by cable.
In 1930 in the Swiss city named Basel the Bank of the International payments has been created. The purpose of creation was financial support of the young independent states and the states temporarily testing deficiency of the payment balance.
1944
Bratton Wood conference has been conducted in the USA . It has been counted as the termination of the American-British rivalry. There were two largest figures at conference: John Maynard Keynes ( England ) and Harry Deckster Whyte ( USA ). They manage to create and accept the new order of world financial system development in current conditions.
Main notice of Bratton - Wood conference.
" The international currency fund becomes the major institute supervising the international financial and economic attitudes; " The currencies playing a role of the international reserves (dollar and de facto pound sterling) are proclaimed; The adjustable parities of currencies adhered to US dollar (the deviation 1 % is possible) established; the dollar is adhered to gold (ounce of gold - $35); " Members of IMF have the right to change parities only with the consent of IMF; " On transitional end all currencies should become convertible; for observance of this principle all governments undertake to store the international reserves, and if necessary - to make interventions on currency markets. " Members of IMF do a payment by currency and gold.
1947
The program of restoration of the European economy has been accepted in the USA for the suspension of communism approach. The USA state secretary Marshall depicts the plan in his report. According to following plan the economy of Europe will be improved up to that level when it can independently support the military potential. One of the problems was satisfying of "dollar famine". If in 1949 dollar obligations of the USA to Europe made 3.1 billion they have reached 10.1 billion dollars.
1958
The majority of the European countries declare free convertibility of the currencies.
1964
Japan has declared convertibility of its own currency. After the announcement of convertibility of the basic currencies it became clear, that the USA cannot stay able to support the price of $35 for ounce of gold anymore. Dollar inflation has made threat for the USA . Kennedy administration had been accepted a number of incorrect actions - the tax to the percentage differential raising costs of foreign borrowers, and the program of voluntary restriction of foreign credits is entered. The tax and restrictions were an incitement to occurrence of the new market - the market of Eurodollars.
1967
There was a devaluation of English pound that has stroked last blow on illusory stability of Bretton Wood system. In 60-s deficiency of the balance of payments in the USA leads to reduction of gold reserves with 18 up to 11 billion dollars. There is an increase of external duties of the USA simultaneously to it.
1970
Interest rates in the USA that generate the strongest crisis of dollar are sharply reduced. There was a massive capital outflow from the USA to Europe where the level of interest rates was higher.
May 1971
Germany and Holland declare temporary free fluctuations of the currency rates.
August 1971
Growth of deficiency of the paymen balance of the USA has compelled the president Richard Nickson to suspend convertibility of dollars in gold.
December 1971
The last attempt to keep Bretton - Wood system has been undertaken at the meeting in Smithsonian institute in Washington . The interval of deviations of exchange rates from parities has been increased up to 4.5 %.
To keep borders of an interval it was very uneasy. And later Bundes Bank has lead intervention for the sum of 5 billion dollars. It was the enormous sum at that time, but it has not brought the success. Currency stock exchanges in Europe and in Japan should be closed temporarily and the USA have declared devaluation of dollar on 10 %. The developed countries have stopped to support the fixed parities and were started up in currency navigation.
1973-1974
The USA had cancelled stage by stage with the tax to percentage differential and the program of voluntary restriction of foreign credits.
The Bratton-Wood system had stopped its existence.
Last years of Bretton - Wood system existence currency traders extracted big speculative profit during the periods following the termination of interventions of the central banks. After the refusal of the rates the opportunity of such profit extraction became strongly limited. Many banks have incurred large losses, and two known as "Bankhaus Hershtadt " in Colon and " Franklyn National " in New York - even have gone bankrupt because of unsuccessful speculative operations.
1976
The Jamaican conference ( Kingston ) has taken place. The representatives of major world states have generated new principles of World currency system formation. The states have refused use of gold as means of a covering of deficiency at the international payments.
The interstate organizations regulating currency attitudes, convertibility of currencies act as basic elements of new system. National currencies of the states act as payment means. Commercial banks act as the main mechanism by means of which the international currency transactions are carried out.
1978
European Voluntary System (EVS) is created. Core of EVS is the grid of cross-countries - exchange rates with the central and boundary values of exchange rates. Basically EVS reminds Bretton Woods. If the cross-country-rate comes nearer to the border, both parties are obliged to carry the intervention out. Deutch Mark is a key currency of EVS.
1985
Gradually ecu becomes not accounting, but the physical tool. Traveler's cheques denominated in ecu and credit cards are issued, banks open deposits in ecu.
January 1999
There was a new European currency called Euro which replaced ECU by its self. 11 European states have fixed exchange rates in relation to Euro. The European central bank started to operate a currency policy of the European currency union (EMU). The fixed exchange rates of participants of the European currency union to Euro:
EUR/LUF 40.3399 Luxembourg franc EUR/BEF 40.3399 The Belgian franc EUR/IEP 0.787564 Irish pound EUR/FIM 5.94573 The Finnish mark EUR/PTE 200.482 The Portuguese escudo EUR/ESP 166.386 Spanish peseta EUR/ITL 1936.27 Italian lira EUR/FRF 6.55957 The French franc EUR/DEM 1.95583 Deutch mark EUR/NLG 2.20371 The Dutch gulden EUR/ATS 13.7603 The Austrian shilling
As against other financial markets currency market is characterized by a great volume of the tenders, the lowest cost of spent transactions, and the fastest movement of money resources. It is the unique world market working 24 hours a day. Its liquidity has increased up to 1 billion US dollars a day. Now operations at the currency market are the basic source of incomes of world conducting banks, such as: Chase Manhattan Bank, Barclays Bank, Swiss Bank Corporation and so on. Soros's gamble on sale of English pound against DM which has brought billion dollars of net profit within 2 weeks became classical, having made Soros famous and having his charities begun. The opportunity of work in the financial markets of Asia, Europe and America became accessible, due to their association in one global communication network. 24 hour access on the currency market allows to open and close positions during optimum time and under the best price. Big profit can be extracted at rather small deposit during a short time interval. One phone call or simple pressing a key of "mouse" (at carrying out of operations with the help of our information-trading system) is enough to open position.
Source : Northfinance.com
The main currencies which are shared on the basic volume of all operations in the FOREX market today are: the euro (EUR), the Japanese yen (JPY), the Swiss franc (CHF) and English pound of sterling (GBP) and US dollar (USD). The daily volume of conversion operations in the world makes about 2 billion US dollars. The turnover for the London market was about 30% of, for the market of the USA - 20%, Germany - 10%. Operations with US dollar make 70 %. About 15 % of turnover at FOREX market today is on a share of electronic brokers. The day time volume of operations of the largest international banks (Deutsche Bank, Barclays Bank, Union Bank of Switzerland, City Bank, Chase Manhattan Bank, Standard Chartered Bank) reaches billions of dollars. The operations of (spot) type or current conversion operations are transactions of sale and purchase of currency. Actual execution (value) of fallowing is carried out for the second working day after the day of the conclusion of transaction. Typical volumes of transactions in interbank trade make 10 million dollars, but due to the system of margin trade. The output in the market is also accessible to the persons having small capital. The brokers, rendering services of margin trade, demand entering of the mortgaging deposit and enable the client to make operations of currency sale and purchase for the sums, of 100 times bigger than the brought deposit. The risk of losses is assigned to the client. The deposit serves as the insurance for the broker. The international currency market has deep centuries-old roots. It has originated more than thousand years B.C. when the first metal money has appeared in Egypt . Money market operations in their present understanding have started to develop in middle Ages. It has been associated with development of international trade and navigation. Italian shroffs were considered as the first speculators with foreign currency. They earned on the currency exchange of the different states.
The currency exchange market has changed at the interstate attitudes development, getting more and more precise outlined. The most significant changes have been brought in the currency market development in XX century. Finding of modern features by the market began in 70th years of 20 centuries when the system of the fixed rates of one currency into another has been removed. After removal of restrictions on fluctuations of currencies the new kind of business based on profit extraction according to conditions of free system of the exchange rates changing. And change of a rate is caused by all possible market conditions and adjusted only by a supply and demand.
The basic stages of the world financial market development in 30th years of XX century. World financial crisis. Economical trading contacts are broken. Times of golden coin standard have gone to the past. In the middle of 30's London becomes the World Financial Center . Great British Pound becomes the base currency for trading operations and forming of currency reserves. And then pound had a slang name "cable" already. That was associated with the factor that transactions were conducted on the telegraph and the information was transferred by cable.
In 1930 in the Swiss city named Basel the Bank of the International payments has been created. The purpose of creation was financial support of the young independent states and the states temporarily testing deficiency of the payment balance.
1944
Bratton Wood conference has been conducted in the USA . It has been counted as the termination of the American-British rivalry. There were two largest figures at conference: John Maynard Keynes ( England ) and Harry Deckster Whyte ( USA ). They manage to create and accept the new order of world financial system development in current conditions.
Main notice of Bratton - Wood conference.
" The international currency fund becomes the major institute supervising the international financial and economic attitudes; " The currencies playing a role of the international reserves (dollar and de facto pound sterling) are proclaimed; The adjustable parities of currencies adhered to US dollar (the deviation 1 % is possible) established; the dollar is adhered to gold (ounce of gold - $35); " Members of IMF have the right to change parities only with the consent of IMF; " On transitional end all currencies should become convertible; for observance of this principle all governments undertake to store the international reserves, and if necessary - to make interventions on currency markets. " Members of IMF do a payment by currency and gold.
1947
The program of restoration of the European economy has been accepted in the USA for the suspension of communism approach. The USA state secretary Marshall depicts the plan in his report. According to following plan the economy of Europe will be improved up to that level when it can independently support the military potential. One of the problems was satisfying of "dollar famine". If in 1949 dollar obligations of the USA to Europe made 3.1 billion they have reached 10.1 billion dollars.
1958
The majority of the European countries declare free convertibility of the currencies.
1964
Japan has declared convertibility of its own currency. After the announcement of convertibility of the basic currencies it became clear, that the USA cannot stay able to support the price of $35 for ounce of gold anymore. Dollar inflation has made threat for the USA . Kennedy administration had been accepted a number of incorrect actions - the tax to the percentage differential raising costs of foreign borrowers, and the program of voluntary restriction of foreign credits is entered. The tax and restrictions were an incitement to occurrence of the new market - the market of Eurodollars.
1967
There was a devaluation of English pound that has stroked last blow on illusory stability of Bretton Wood system. In 60-s deficiency of the balance of payments in the USA leads to reduction of gold reserves with 18 up to 11 billion dollars. There is an increase of external duties of the USA simultaneously to it.
1970
Interest rates in the USA that generate the strongest crisis of dollar are sharply reduced. There was a massive capital outflow from the USA to Europe where the level of interest rates was higher.
May 1971
Germany and Holland declare temporary free fluctuations of the currency rates.
August 1971
Growth of deficiency of the paymen balance of the USA has compelled the president Richard Nickson to suspend convertibility of dollars in gold.
December 1971
The last attempt to keep Bretton - Wood system has been undertaken at the meeting in Smithsonian institute in Washington . The interval of deviations of exchange rates from parities has been increased up to 4.5 %.
To keep borders of an interval it was very uneasy. And later Bundes Bank has lead intervention for the sum of 5 billion dollars. It was the enormous sum at that time, but it has not brought the success. Currency stock exchanges in Europe and in Japan should be closed temporarily and the USA have declared devaluation of dollar on 10 %. The developed countries have stopped to support the fixed parities and were started up in currency navigation.
1973-1974
The USA had cancelled stage by stage with the tax to percentage differential and the program of voluntary restriction of foreign credits.
The Bratton-Wood system had stopped its existence.
Last years of Bretton - Wood system existence currency traders extracted big speculative profit during the periods following the termination of interventions of the central banks. After the refusal of the rates the opportunity of such profit extraction became strongly limited. Many banks have incurred large losses, and two known as "Bankhaus Hershtadt " in Colon and " Franklyn National " in New York - even have gone bankrupt because of unsuccessful speculative operations.
1976
The Jamaican conference ( Kingston ) has taken place. The representatives of major world states have generated new principles of World currency system formation. The states have refused use of gold as means of a covering of deficiency at the international payments.
The interstate organizations regulating currency attitudes, convertibility of currencies act as basic elements of new system. National currencies of the states act as payment means. Commercial banks act as the main mechanism by means of which the international currency transactions are carried out.
1978
European Voluntary System (EVS) is created. Core of EVS is the grid of cross-countries - exchange rates with the central and boundary values of exchange rates. Basically EVS reminds Bretton Woods. If the cross-country-rate comes nearer to the border, both parties are obliged to carry the intervention out. Deutch Mark is a key currency of EVS.
1985
Gradually ecu becomes not accounting, but the physical tool. Traveler's cheques denominated in ecu and credit cards are issued, banks open deposits in ecu.
January 1999
There was a new European currency called Euro which replaced ECU by its self. 11 European states have fixed exchange rates in relation to Euro. The European central bank started to operate a currency policy of the European currency union (EMU). The fixed exchange rates of participants of the European currency union to Euro:
EUR/LUF 40.3399 Luxembourg franc EUR/BEF 40.3399 The Belgian franc EUR/IEP 0.787564 Irish pound EUR/FIM 5.94573 The Finnish mark EUR/PTE 200.482 The Portuguese escudo EUR/ESP 166.386 Spanish peseta EUR/ITL 1936.27 Italian lira EUR/FRF 6.55957 The French franc EUR/DEM 1.95583 Deutch mark EUR/NLG 2.20371 The Dutch gulden EUR/ATS 13.7603 The Austrian shilling
As against other financial markets currency market is characterized by a great volume of the tenders, the lowest cost of spent transactions, and the fastest movement of money resources. It is the unique world market working 24 hours a day. Its liquidity has increased up to 1 billion US dollars a day. Now operations at the currency market are the basic source of incomes of world conducting banks, such as: Chase Manhattan Bank, Barclays Bank, Swiss Bank Corporation and so on. Soros's gamble on sale of English pound against DM which has brought billion dollars of net profit within 2 weeks became classical, having made Soros famous and having his charities begun. The opportunity of work in the financial markets of Asia, Europe and America became accessible, due to their association in one global communication network. 24 hour access on the currency market allows to open and close positions during optimum time and under the best price. Big profit can be extracted at rather small deposit during a short time interval. One phone call or simple pressing a key of "mouse" (at carrying out of operations with the help of our information-trading system) is enough to open position.
Source : Northfinance.com
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