Modern Advancements in Forex Trading

The world of forex is ever-changing. The markets move at lightning speed, and trends emerge in an instant. Fast-paced, volatile, and tempestuous, trading is a game that will always keep you on your toes.

 Like the markets it represents, forex-based technology also continually evolves. The past decades have seen the rapid emergence of wave after wave of new developments, each of them improving the way that we trade, and making everything better, faster, and more competitive.

Here, we look at just three of the ways that technology has transformed the markets….

#1: Speed

In times gone by, currency trading was a different game entirely. Without the computers and smartphones that so easily enable us to trade, every move had to be made in person through a broker, and it was a laborious process. Today, this has changed completely. Where once information was outmoded, the data on display a snapshot into a past that had already altered, trades can now be conducted in the blink of an eye, and the figures that we see are entirely contemporaneous. Take a glance at your screen and you’ll have a perfect picture of the markets. Press a button and your dreams will be made material. Everything happens in an instant.

#2: Software

Even in the last couple of years, technology has progressed at a remarkable speed. In the days of old, trading was limited to sitting in front of a specially set-up computer, and when you weren’t beside it, you couldn’t make a move. Luckily, this is no longer the case. Now, you can trade from almost any device that you desire, whether it’s your MacBook or your smartphone. Brokers like OANDA make sure that every software option you could dream of is available to you, so that you can trade whenever and wherever you wish to.

#3: Flexibility

As we briefly touched on above, this ever increasing array of software trading options has made one very dramatic difference to a lot of people: it has improved the flexibility of investing. Where once this would have been almost impossible for those who had to leave their house to work each day, now, people can fit it in whenever they have a spare moment, whether this is on the train during their morning commute, or in their office during their lunch hour. Trading can be worked around your timetable, because when you can trade anywhere and at any time, it’s entirely up to you.

With so many exciting developments already revolutionising the world of the foreign exchange, just imagine what tomorrow might bring.

source: 20smoney.com

What a strong dollar means for US economy

WASHINGTON - US exporters and multinational companies are beginning to feel the pain from a dollar that has hit its highest level in 12 years.

But analysts say the greenback's sharp climb will only slightly slow the overall US economy.

From farm exporters to the chemicals industry, the moaning is growing more audible about losing competitiveness to competitors in Europe, Brazil and elsewhere.

On Wall Street, companies like IBM, Kimberly-Clark, Microsoft, Procter & Gamble, and Caterpillar have all blamed slower earnings on the currency.

Earlier this week software giant Oracle said revenues in its most recent quarter, at $9.3 billion, were 6 percent lower than they would have been if the dollar had held steady.

In the past year, the dollar has soared 32 percent against the euro, 39 percent against Brazil's real, 18 percent on the yen, 16 percent on the Canadian dollar, and 13 percent against the pound.

Overall, against a trade-weighted basket of currencies, the rise has been 20 percent. For US export rivals, that is a strong gain in their competitiveness.

It gives, for instance, farmers in Brazil and Canada big advantages.

"It has an especially large impact on the wheat and cotton sectors, where we export half of the crops or pretty close to it," said Richard Pottorff of farm industry specialists Doane Advisory Services.

Steve Meyer of Iowa-based consultant Paragon Economics says US pork and chicken exporters are beginning to feel the pain.

"Any time the value of the dollar goes up it makes our products more expensive."

"It's not as if you can't grow, but it certainly makes it more difficult. You've got to find some more creative ways to market your products."

'King Dollar' hits Wall Street

The problem is mounting as well on Wall Street, said Nicholas Colas, chief market strategist at the brokerage Convergex.

"If you run a US multinational company, or own its shares, 'King Dollar' is proving to be a bit of a tyrant."

Colas pointed out that analysts are slicing their earnings forecasts for listed companies.

They now predict an average 1.9 percent fall in revenue for the third quarter this year, compared to predictions of a 1.7 percent rise just two months ago.

"No company hedges for revenues so the impact on sales growth will be fully visible," Colas said.

Overall impact muted

Yet so far the strong greenback has only had a modest impact on the overall economy, in part because of the very strengths that underpin its surge.

"The US economy looks pretty good ... That's driving a lot of investment in the US as a bit of a safe haven," noted Chad Moutray, the chief economist for the National Association of Manufacturers.

Economists say that the economy's low dependence on exports also works to its benefit, in this case.

Exports make up around 10 percent of gross domestic product, whereas in a country like Germany, they are 50 percent, noted Nariman Behravesh, chief economist at IHS.

And with domestic consumption the primary driver of growth, the stronger dollar means lower import prices and so, potentially, more spending power for American families.

"If you look at the economy as a whole, the damage is fairly limited," Behravesh said.

Dollar's rise to continue

But if the dollar continues to climb, the pain could mount. A surprisingly dovish Federal Reserve cited the strong dollar's impact on exports for its downgrade of growth forecasts on Wednesday.

That send the dollar sinking four cents to $1.101 against the euro, for example.

But by Thursday it was back to $1.0665 and experts expect more strengthening in the coming weeks, heading toward euro parity.

"This headwind is going to be with us for a while, this is not temporary," said Moutray. "Manufacturers are going to need to find ways to compete."

Behravesh, though, notes that the dollar has swung much more sharply in the past, and the economy survived just fine.

"Our experience in the US is that, periods of dollar strength are typically followed by periods of dollar weakness," said Behravesh.

"Foreign exchange markets tend to overreact, overcorrect... Certainly by next year we'll see some firming up by the euro."

source: www.abs-cbnnews.com

PSEi closes at another all-time high

MANILA, Philippines - The Philippine Stock Exchange index surged to another all-time high on Wednesday, buoyed by expectations of easing inflation or the overall rise of prices of goods and services.

The main index closed nearly a percent up to 7,847.83, led by property companies Ayala Land Inc., Robinsons Land Corp., and SM Prime Holdings, ahead of the February inflation report due out on Thursday.

At least one analyst says expectations of further slowing inflation last month have boosted the outlook on many of the country's big property companies.

Lower inflation means the Bangko Sentral will have more room to keep rates at low levels, allowing consumers to borrow at cheaper rates to buy big-ticket items like houses or condo units.

At the foreign exchange market, the peso weakened to P44.10 against the US dollar.

Meanwhile, Asia markets mostly fell Wednesday following a retreat on Wall Street fuelled by profit-taking, with Tokyo hit by a stronger yen and Sydney dipping after data showed Australia's economy grew slower than expected last year.

With few trading cues investors are keeping a watch on the start of China's annual parliament meeting Thursday as well as European Central Bank details on its new bond-purchase scheme.

Tokyo lost 0.59 percent, or 111.56 points, to 18,703.60, Sydney, which ended at a seven-month high Monday, fell 0.54 percent, or 32.3 points, to 5,901.6 and Seoul lost 0.15 percent, 3.09 points, to 1,998.29.

Hong Kong fell 0.96 percent, or 237.40 points, to 24,465.38 but Shanghai rose 0.51 percent, or 16.48 points, to 3,279.53.

"The lack of fresh sparks has prompted investors to take profits and wait for new signals," Matthew Sherwood, Sydney-based head of investment markets research at Perpetual Ltd., told Bloomberg News.

Dealers took their lead from New York, where the three main indexes -- which have been on a six-year bull run -- ticked downwards after hitting key levels.

The Dow fell 0.47 percent and the S&P 500 slipped 0.45 percent, both a day after hitting new records. The Nasdaq slipped 0.56 percent after breaking 5,000 points for the first time in 15 years.

Tokyo led Asia's losers as the yen recovered slightly from recent losses against the dollar, with the greenback easing to 119.67 yen from 119.74 yen in New York Tuesday afternoon.

The euro bought $1.1171 and 133.68 yen against $1.1178 and 133.85 yen.

Slow Australian economy

In Australia, official figures showed the economy grew 0.5 percent on-quarter in the three months to December and 2.5 percent over the whole of 2014 -- below forecasts of 0.7 percent and 2.6 percent respectively.

The news comes a day after the Reserve Bank of Australia held off cutting interest rates for a second-straight month, but analysts say it will likely act again soon as jobless queues become longer and consumers stop spending.

Focus will next turn to the meeting of China's rubber-stamp legislature, the National People's Congress, at which Premier Li Keqiang is expected to deliver an address on the state of the economy.

Later in the day the ECB will hold its next policy meeting and outline details of the asset-purchase programme that it is launching in a bid to kickstart the eurozone economy and fight off deflation.

Oil prices were mixed ahead of the release of a key US energy inventory report later in the day. US benchmark West Texas Intermediate rose eight cents to $50.60 while Brent crude eased 31 cents to $60.71.

Prices rose Tuesday on news of growing unrest in exporter Libya.

Gold fetched $1,205.23 against $1,207.80 late Tuesday. - With reports from ANC and Agence France-Presse

source: www.abs-cbnnews.com

Learning To Make Money With Forex Trading

Becoming a professional Forex trader is a popular business path for many interested in making a considerable amount of money with a minimum amount of physical labor. According to a recently conducted BIS survey, the value of all trades on the global currency market is worth a staggering $5.3 trillion a day. Experts estimate that roughly 95 per cent of currency trades made on the Forex market are pure speculation in an effort to make a profit.

Before becoming a Forex trader, it is important to learn about the Forex market. Failure to do your research ahead of time can result in the loss of a lot of your capital very quickly. Spread betting is a term that every Forex trader should understand. Spread betting is making money from the difference between a start value of a currency and its finish value. If the start value is smaller than the finish value, the trader profits from the rise in a price.

The fees that the trader will pay on spread betting will depend on how long the bet is kept open. If the transaction is open for a day or two, the financing charge will likely be small. For bets ranging up to three months, the fee could be considerably more for many of the major currency pairs.

When spread betting, currency traders will often use leverage, which involves borrowing more than their initial deposit amount to trade in the market, typically in an effort to maximize profits. However, if the market swings in an unexpected direction, traders can lose their initial deposit and face a ‘margin call’ for the additional losses sustained in the trades.

Some people think that using leverage will earn them substantial gains, but forget that it could cause substantial losses as well. Excessive leverage can destroy an otherwise winning strategy, producing excessive losses if the trader has a streak of bad luck. Some experts recommend by using no more than 10x effective leverage.

It is important to remember that Forex trading will not be a shortcut to instant wealth. The amount earned in the Forex market is determined mostly by the amount of capital you are willing to risk in the market. Forex trading is a volatile asset class, sometimes recording triple digits swings in a day. Many people like to get started with Forex trading by opening a demo Forex account where they can explore Forex trading without risking their funds. Free guides and online tutorials are also available to help beginners learn about trading in the Forex market.

source: everybodylovesyourmoney.com

How these small groups of traders manipulated forex markets

LONDON - In online messages full of bravado and Cockney rhyming slang, small groups of traders using names such as "The Three Musketeers" and "The A-team" colluded to manipulate foreign currency markets to maximize their profits.

They used private chats to share confidential information about deals being placed with their rival banks, and used that information to push benchmark rates up or down depending on what would earn them the most, regulators said.

"How can I make free money with no fcking(sic) heads up," said one trader in an exchange published by Britain's Financial Conduct Authority, which with US and Swiss regulators levelled hefty fines Wednesday against five major banks for rigging markets.

"Go early, move it, hold it, push it" -- read one of the chatroom lines, summing up how markets were manipulated.

Clients would place an order with their bank for a certain amount of euros, pounds or dollars to be bought or sold at a specific benchmark rate for that day, known as the "fix".

Traders are alleged to have put their orders together -- known as "building" or "leaving you with the ammo" -- to give them enough volume to shift the market before the fix is set.

Banks profit if they buy the currency at a lower rate on the market than the fix rate at which they sell to clients.

'Nice work gents'

The most widely used benchmarks are the so-called 1:15pm daily fix by the European Central Bank, which is based on a snapshot of the market early afternoon, and the 4pm fix by WM Reuters (WMR), which takes an average of trading over a one-minute period.

In one example published by the FCA, US bank Citigroup had orders to buy 200 million euros at the 1:15pm euro-dollar fix.

The FCA claims the bank added to this order by "building" from other banks, and in the 15 seconds before the fix was set, used the volume of currency to push up the market price.

It placed a number of orders increasing in size and price, pushing up the average market rate so that the fix was set higher than it would have been even a minute earlier.

After the fix, the traders congratulated each other on a $99,000 profit for Citibank: "impressive" and "cnt [can't] teach that", they said in the online chatroom.

Similar conversations were evident involving traders from the other four implicated banks -- HSBC, Royal Bank of Scotland, JPMorgan Chase and UBS.

In one deal that made HSBC a $162,000 profit, a trader remarked, "nice work gents... I don my hat", while in another making $33,000 for JPMorgan one crowed: "we... do... dollarrr".

The traders also talked about "betty" -- Betty Grable, the US film star and rhyming slang for cable, as the sterling-dollar market is known -- and their huge bonuses, the FCA said.

"They are not trying to coordinate for the interests of their customer. They are coordinating for the interests of their own bottom line," said Therese Chambers, who led the FCA investigation.

Many firms have now imposed restrictions or outright bans on the chat rooms used by their traders.

The FCA's chief executive Martin Wheatley said preventing this kind of collusion was "not rocket science".

"It's fairly simple things like watching the extent to which people are using mobile phones on the trading floor, allowing them unmonitored use of private chat rooms, monitoring the activity around particular benchmark fixing points," he said.

Simon Hunt, a financial services risk and regulation partner at the consultancy PricewaterhouseCoopers, said banks had increased their surveillance following previous unauthorised trading incidents.

"Good progress is being made by bank management but culture change does not happen overnight," he said.

source: www.abs-cbnnews.com