:: Managed forex trading account: the truth about managed accounts

After spending some time reading various public forums, it is clear that there is a lot of demand from investors to diversify away from the traditional mutual funds into managed forex. Some people just seek high returns on their money through someone else's forex trading. Unfortunately, the truth is the vast majority of managed accounts are negative after 12 months, many even receiving margin calls before the 12 months are up.
There are a very large number of managed accounts out there now. Even a simple Google search will provide many traders offering their services. "Over 95% of traders lose money". This statement is certainly no different when it comes to managed accounts. Many traders offering managed account earn commissions for every trade they place on your account, even the bad ones. This enables the trader to get live trading experience with no risk to his own money (because he is risking yours) and also gets paid flat commissions. A win win situation for the trader. A bad deal for your money.
Other Managed Accounts take a percentage commission based on the performance. A monthly performance fee is definitely better suited to the trader. Lets say a trader earns 3% per month for 11 months, he picks up nice commissions every month, but say he then loses 50% in month twelve (may seem unlikely but I have seen many Managed Accounts face a similar fate) your account will be lower than its nominal value but the trader will still have made nice amounts on the commissions. If however the commissions were on an annual basis. You would not have to pay anything.
In conclusion, most managed forex accounts really are not worth your time, it is sad, but it is true. Most will fail and lose some or all of your money. However, on a brighter note there are managed accounts out there that have beaten the stock market in the long term, but they take a lot of finding. Do your research, never give control of your money to anyone lightly.
Source Forexpm.com - Free Forex news, strategies, information, ebooks
* * * * * * * * * * * * * *
Forex Managed Accounts were created for investors with risk capital who chose to have a professional trade on their behalf. In a Forex Managed Account, the positions are held in the investors account, independent of other investors. Unlike mutual funds or hedge funds, which commingle your funds with other investors, a Forex Managed Account is an account held exclusively in your name and all or part of your funds can be redeemed within one day. There is no lock up period and no withdrawal fees.
Forex Managed Accounts - financial safeguards to ensure that companies perform on their customers' open futures and options contracts. Clearing margins are distinct from customer margins that individual buyers and sellers of futures and options contracts are required to deposit with brokers. Within the futures industry, financial guarantees required of both buyers and sellers of futures contracts and sellers of options contracts to ensure fulfilling of contract obligations. FCMs are responsible for overseeing customer margin accounts. Margins are determined on the basis of market risk and contract value. Also referred to as performance-bond margin.
Self-trading in the currency markets can be a difficult proposition. To be successful, a currency trader must follow market movements 24 hours a day, six days a week. Many Forex investors do not have the time, experience or desire to self trade, but seek the diversification and profit potential that foreign exchange trading offers.

:: Forex hedging

Forex hedging has emerged as one of the colloquial rescuing strategies for forex investors, individual investors, portfolio managers and corporations for protecting capitals. It is simply the purchase of insurance policy with respect to the currency position. Some real time incidents of rise and fall of forex trading are as follows
The Canadian dollar faces a heavy fall against the US dollar since March 2007 due to the drastic decreases in the cost of crude oil.
Even the value of Indian Rupees faces a heavy cut after huge capital was pulled way from the market by the foreign investors due to the global financial crunch.
In spite of the recent highs attained by the Japanese yen, it falls against other currencies. This was basically caused due to the massive cutting of the rates.
Thus, hedging has emerged as the urgent need for forex traders, with such rampant rises and falls in forex industry.
A derivative, a reliable investment instrument, provides deeper insight to the forex traders regarding the capacity of the backup plans.
The two major kinds of derivatives used in forex hedging are:
Futures
Options
1. Futures contract is one of the derivatives used by the forex traders for hedging. This follows the exchange agreement in which currencies are exchanged on a particular day, depending solely on the last second value of the closing date just like stocks, the currency futures are thereby sold in any market.
Example: If a forex trader chooses to use dollars for the respective longer position of euros in the current market (say 1.2700). What if the price drops? He then decides to have a short position of 1.2650. He believes that this hot would compensate the loss faced by the longer position. But then, there is no guarantee that the market would witness a rise after the short has been decided by the investor. Thus, to avoid the risk, the investor should go for short(USD/CHF) and long trading with EUR/USD. This creates the currency pairing of EUR/CHF with the 2 different pairs.
2. Internationally dealt businesses employ the other form of forex hedging.
For example, any company with higher number of customers in Europe will definitely be troubled if euro weakens. Obviously, then the earlier conversion rate of euros to dollars wont be applicable. But then it adopts a longer position in rates of dollars, when with respect to euros, it might recoup all the losses. In case, the fall in the rates of dollars is considered, the increased value of euros would cause increase in the profits. Thus, any kind of threat which the company might have faced gets neutralized.
At the same time, it's clever to stick to long for a particular currency pair, offering higher interests. After it, the pair which does not demand interest can be kept for short. Thus, creation of hedge in between the two currencies can be done through options.
Let's imagine, the investor takes the long at 116.00 of USD/JPY. Then, a further long for a put option of strike price is taken at 115.50. For break even, the price needs to go at least 20 pips. At the same time, if the price does not sink lesser than the 115.50, option cost would be lost. Put options would turn quite worthy enough the price goes down than 114. So subtracting the profit on options and loss on position, the investor faces a only loss of 70 pips. Thus, he is hedged, saving himself from stupendous loss.
Though hedging might sound as fool proof, it does not reduce the concept of risk return takeoff. Thus, hedging is not utilized for making money but to lessen the potential losses which might be caused. Thus, it should be adopted with concern.

:: Forex foreign currency risk management

With the upcoming of internet and apparent marketplace for individuals and organizations to perform on international dealings, there is a rapid increment in the international commerce. Momentous variations in the global financial and political scenery resulted in uncertainty associated with the track of foreign exchange charges. This vagueness in turn led to instability and the requirement for an effectual medium to evade foreign trade rate risk and the interest charge varies while, at the very point of time, successfully certifies a potential financial location.
Each organisation and the person that has revelation to overseas exchange charge risk will possess precise overseas exchange prevarication wants and the main web site cannot probably wrap every active overseas exchange-hedging circumstances. Therefore, we have to cover up the ordinary reasons that a overseas exchange prevaricate is positioned and explains how to appropriately evade overseas exchange charge risk.
Overseas trade Rate Risk introduction - overseas trade rate risk introduction is frequent to practically all who perform international commerce and trading. Purchasing and selling of merchandise or services designated in overseas currencies that can right away describe you to overseas trade rate risk. If a fixed price is estimated ahead of instance for a convention using an overseas trade rate that is believed suitable at the occasion the quotation is given, the overseas trade rate quotation may not essentially be suitable at the occasion of the definite harmony or presentation of the agreement. Introducing an overseas trade hedge can help to direct this overseas exchange charge risk.
Interest price Risk revelation - Interest rate revelation points to the interest charge discrepancy among the two nation's currencies in a overseas exchange agreement. The interest charge disparity is also approximately equivalent to the "carry" charge paid to elude a forward or upcoming contract. The arbitragers are depositors that obtain benefit when interest charge discrepancies among the overseas exchange mark rate and both the forward or upcoming contract are sometimes high or sometimes low. In other terms, an arbitrager can trade when the bearer cost that needs to be collected is at a finest to the real carry rate of the agreement sold. In opposition, an arbitrager will purchase when the take over cost to be paid is very much less than the real carry price of the indenture bought.
Foreign Speculation / Stock Revelation - Overseas investing is measured by many depositors as a method to either branch out a speculation selection or search for a outsized return on speculation(s) in a financial system believed to be budding at a quicker speed than investment(s) in the particular familial economy. Endowing in overseas stocks involuntarily represents the investor to overseas trade rate risk and exploratory risk. For example, an investor purchases a meticulous quantity of foreign notes in order to buy shares of a overseas stock. The depositor is now involuntarily uncovered to two different risks.
Prevarication Exploratory Positions - overseas currency exchangers utilize overseas trade hedging to defend open standards against unpleasant moves in overseas trade rates, and locating a foreign trade hedge helps to direct overseas exchange charge risk. Exploratory situation is hedged through different foreign trade hedging mediums that may be used alone or in blended format to produce entirely novel overseas trade hedging strategies.

:: FOREX Capical Market

The Forex Capital Market is a currency market where one currency is traded against another. In terms of money traded per day, the Forex Capital Market weighs in at the largest in the world with over 3 trillion dollers changing hands each day.
The many participants of this market include governments, banks, speculators and other financial institutions.
There is no central market as such for the Forex like there is for the NASDAQ or NYSE. Instead, money is traded between banks around the world forming a market commonly known as the Interbank Market. This trading around the world also results in the 24 hour nature of the Forex.
The effect of having such a large market gives the Forex some unique characteristics:
A huge amount of volume
More than $3 trillion per day.
This leads to high liquidity
Making it relatively easy to get in and out of the market.
The amount and diversity of traders in the market
Participants include:
Banks - trading billions of dollars a day on behalf of customers or their own accounts.
Commercial Companies - to hedge against currency shifts when paying and receiving for foreign goods and services.
Central Banks - trading to attempt to control their countries currencies.
Hedge Funds - basically large scale speculation.
Retail Forex Brokers - catering largely for the general public and smaller scale speculators.
The long trading hours
Monday, 9.00am New Zealand to Friday 5.00pm New York. The main trading centres for the Forex are considered to be London, New York, and Tokyo. When one trading centre is closing the next will be starting.
The wide variety of factors that influence the change in currency prices
Changes in currency rates are largely influenced by different countries GDP growth, interest rates, employment figures, stock markets, budgets and trade deficits.
In recent years, the Forex has become increasingly popular for private traders. Signs of this can be seen in the emergence of the many Retail Forex Brokers who offer enticing amounts of leverage to trade this market. Before trading the Forex it pays to do much research when developing a trading methodology. Many retail brokers offer practice accounts where novice traders can test their trading systems in real time.

:: Currency Trading

Have you heard about FOREX? How currencies are traded?
When you think about Forex, what do you think of first? Which aspects of Forex are important, which are essential, and which ones can you take or leave? You be the judge.
Let’s talk about FOREX and advantages of FOREX trading.
The good thing about FOREX is that the amount of money you need to place a trade (known as “margin”) is all that can be lost!
Of course, with the proper self-taught education you will win more than you will lose, but you should know that despite the high leverage of FOREX trading (200:1 is possible, which means that when you put up $1 the trading vendor will allow you to trade it as if you have $200), it’s still less risky than futures (commodities) trading. And when you trade stocks you can’t get this type of leverage.
Because of the FOREX market’s liquidity and twenty four hours continuous trading, dangerous trading gaps and limit moves are eliminated. Orders are executed very quickly, without slippage. If you do your research and find good brokers, they will automatically close some or all of your open positions if your account’s equity falls below the level required to hold the positions. You’ll never lose more than you have in your FOREX account.
Currencies are traded in dollar amounts called *lots* — One lot is equal to $1,000, which controls $100,000 in currency. This is the “margin” I talked about above. You can control $100,000 worth of currency for only 1,000 dollars.
Currencies are always traded in pairs. The most popular currencies and their symbols are:
USD - The US Dollar EUR - The currency of the European Union “EURO” GBP - The British Pound JPN - The Japanese Yen CHF - The Swiss Franc AUD - The Australian Dollar CAD - The Canadian Dollar
A currency can never be traded by itself, so you can’t trade a USD by itself. You always need to compare one currency with another currency to make a trade possible.
The most commonly traded currency pairs are:
EUR/USD Euro / US Dollar “Euro”
USD/JPY US Dollar / Japanese Yen “Dollar Yen”
GBP/USD British Pound / US Dollar “Cable” USD/CAD US Dollar / Canadian Dollar “Dollar Canada” AUD/USD Australian Dollar/US Dollar “Aussie Dollar” USD/CHF US Dollar / Swiss Franc “Swissy” EUR/JPY Euro / Japanese Yen “Euro Yen”
The currency on the left is called the base currency. The currency on the right is the counter currency. For example, when you place an order to buy EUR/USD pair, you are actually buying the EUR and you are selling the USD. When you place an order to sell EUR/USD you are selling the EUR and you are buying the USD. Buying or selling a currency PAIR means buying or selling the base currency, and doing the opposite with the counter currency.
It might seem a little confusing, but actually it is easier to treat the currency PAIR as one item. It means when you place trades you simply sell or buy the pair. The base/counter concept is only important for fundamental analysis.
To decide when to sell or buy you will need to learn technical analysis and/or fundamental analysis.
In currency trading you can make money both, when the currencies go up or down.
The FOREX currency trading is a great way to work from home in your free time. You can trade any time you want, from Monday to Friday. But you must know that you can lose money in FOREX. So, getting the proper education and trading before doing any real trades is a must. Fortunately you can first practice on a demo account, until you get to the point that you win 70% of your trades. Nobody wins 100%. But you can be in profit even with 50% wins.
There are plenty of books and courses to learn currency trading, but be careful with all those $1000+ courses. Usually you can find courses with the same content for much less.

:: Forex Trading Strategies

The world of trading and investment can be as frustrating as it can be rewarding! And FOREX (Foreign Exchange) is no exception - often described as risky, profitable and complicated.
Forex is the largest trading market in the world.
Forex is the worldwide market for buying and selling currencies. These markets were developed to cater for the supply and demand of different currencies by governments, companies and individuals - for international trade and assisting importers and exporters. Therefore those who trade in this market include consumers, businesses, investors, speculators and the banking industry.
Different countries use different currencies - which vary in their values against each other. Forex trading invovles the buying and selling of two currencies - trading pairs - you are selling one and buying another eg you may use the US dollar to purchase British pounds - if the supply of the pound lessens - it will cost more dollars to buy pounds - the Forex trader hopes to sell their pounds at a higher price than the purchase price.
A speculator in Forex is someone who accepts the possibility of adverse exchange-rate movements in the hope of making a profit from favourable movements in currency.
As a speculator you should always start trading with a small amount and have a trading system - which tells you when to get in and out of the market. It is a favourite option for currency traders as you can trade the Forex market 24 hours per day and the transaction costs are minimal.
This market - because of its sheer size - is hard to be manipulated - which stocks can be - it is more likely to be influenced by global news or events. Hence, the opportunity for ‘insider trading’ is eliminated.
However - beware -Forex brokers estimate that 90% of traders lose their money; 5% break even and only 5% achieve profitable results!

:: What to look for in an online Forex broker/dealer

What to look for in an online Forex broker/dealer:1. Low Spreads.In Forex trading the ‘spread’ is the difference between the buy and sell price of any given currency pair. Lower spreads save you money.2. Low minimum account openings. For those that are new to Forex trading and for those that don’t have millions of dollars in risk capital to trade, being able to open a micro trading account with only $250 (we recommend at least $1,000) is a great feature for new traders.3. Instant automatic execution of your orders.This is very important when choosing a Forex broker. Don’t settle with a firm that re-quotes you when you click on a price or a firm that allows for price ‘slippage’. This is very important when trading for small profits. You want what we call a WYSIWYG (pronounced wiz-ee-wig) broker! This means you want instant execution of your orders and the price you see and "click" is the price that you should get...WYSIWYG = What You See Is What You Get!4. Free charting and technical analysisChoose a broker that gives you access to the best charting and technical analysis available to active traders. Look for a broker that provides free professional charting services and allows traders to trade directly on the charts.5. LeverageLeverage can either make you super rich or super broke. Most likely, it will be the latter. As an inexperienced trader, you don't want too much leverage. A good rule of thumb is to not use more than 100:1 leverage for Standard (100k) accounts and 200:1 for Mini (10k) accounts.

:: The Factor to Chose Forex Broker

Before selecting an online Forex broker, you should closely examine their features andpolicies. These include:• Available Currency PairsYou should confirm that the prospective broker offers, at minimum, the seven major currencies (AUD, CAD, CHF, EUR, GBP, JPY, and USD).• Transaction CostsTransaction costs are calculated in pips. The lower the number of pips required per trade by the broker, the greater the profit that the trader makes. Comparing pip spreads of half dozen brokers will reveal different transaction costs. For example, the bid/ask spread for EUR/USD is usually 3 pips, but if you can find 2 pips, that’s even better.• Margin RequirementThe lower the margin requirement (meaning the higher the leverage), the greater the potential for higher profits and losses. Margin percentages vary from .25% and up. Low margin requirements are great when your trades are good, but not so great when you are wrong. Be realistic about margins and remember that they swing both ways.• Minimum Trading Size RequirementThe size of one lot may differ from broker to broker, spanning 1,000, 10,000, and 100,000 units. A lot consisting of 100,000 units is called a “standard” lot. A lot consisting of 10,000 units is called a “mini” lot. A lot consisting of 1,000 units is called a “micro” lot. Some brokers even offer fractional unit sizes (called odd lots) which allow you create your own unit size.• Rollover ChargesRollover charges are determined by the difference between the interest rate of the country of the base currency and the interest rates of the other country. The greater the interest rate differential between the two currencies in the currency pair, the greater the rollover charge will be. For example, when trading GBP/USD, if the British pound has the greater interest differential with the U.S. dollar, then the rollover charge for holding British pound positions would be the most expensive. On the other hand, if the Swiss Franc were to have the smallest interest differential to the U.S. dollar, then overnight charges for USD/CHF would be the least expensive of the currency pairs.• Margin Account Interest RateMost brokers pay interest on a trader’s margin account. The interest rates normally fluctuate with the prevailing national rates. If you decide to take an extended break from trading, the money in your margin account will be accruing interest. Keep in mind that most brokers DO NOT allow you to accrue interest unless your margin requirement is at least 2% (50:1).• Trading HoursNearly all brokers align their hours of operation to coincide with the hours of operation of the global Forex market: 5:00 pm EST Sunday through 4:00 pm EST Friday.Other PoliciesBe sure to scrutinize a prospective broker’s “fine print” section to be fully aware of all the nuances that a specific broker may impose on a new trader. Finding the right broker is a critical part of the process. It’s not easy and requires some real work on your part. Don’t pick the first one that looks good to you. Keep looking and trying different demo accounts.

:: Online Trading (Trading Currency and Stock Trading)

Forex Knowledge is what I say to explain all about Forex. This blog will give anything information about Forex such forex indikator, forex strategy, forex broker, forex tutorial, ebook forex, and all information about forex. So let's start increase your forex knowledge with this introduction.
What is FOREX? The Foreign Exchange market, also referred to as the "FOREX" or "Forex" or "Retail forex" or “FX” or "Spot FX" or just "Spot" is the largest financial market in the world, with a volume of over $2 trillion a day. If you compare that to the $25 billion a day volume that the New York Stock Exchange trades, you can easily see how enormous the Foreign Exchange really is. It actually eq9 P a g e uates to more than three times the total amount of the stocks and futures markets combined! Forex rocks! What is traded on the Foreign Exchange? The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, and are traded in pairs; for example the Euro dollar and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY). Because you're not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy. In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country's economy, compared to the other countries' economies. Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period. Until the late 1990’s, only the “big guys” could play this game. The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with! Forex was originally intended to be used by bankers and large institutions - and not by us “little guys”. However, because of the rise of the Internet, online Forex trading firms are now able to offer trading accounts to 'retail' traders like us. All you need to get started is a computer, a high-speed Internet connection, and the information contained within this site.
What is a Spot Market? A spot market is any market that deals in the current price of a financial instrument. Which Currencies Are Traded? The most popular currencies along with their symbols are shown below: Symbol Country Currency Nickname USD United States Dollar Buck EUR Euro members Euro Fiber JPY Japan Yen Yen GBP Great Britain Pound Cable CHF Switzerland Franc Swissy CAD Canada Dollar Loonie AUD Australia Dollar Aussie NZD New Zealand Dollar Kiwi Forex currency symbols are always three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country’s currency. When Can Currencies Be Traded? The spot FX market is unique within the world markets. It’s like a Super Wal-Mart where the market is open 24-hours a day. At any time, somewhere around the world a financial center is open for business, and banks and other institutions exchange currencies every hour of the day and night with generally only minor gaps on the weekend. The foreign exchange markets follow the sun around the world, so you can trade late at night (if you’re a vampire) or in the morning (if you’re an early bird). Keep in mind though, the early bird doesn’t necessarily get the worm in this market - you might get the worm but a bigger, nastier bird of prey can sneak up and eat you too… Time Zone New York GMT Tokyo Open 7:00 pm 0:00 Tokyo Close 4:00 am 9:00 London Open 3:00 am 8:00 London Close 12:00 pm 17:00 New York Open 8:00 am 13:00 New York Close 5:00 pm 22:00 source: school of pipsology

:: Analysis in Forex

Analysis in ForexThere are 2 basic types of analysis you can take when approaching the forex:1. Fundamental analysis2. Technical analysis.There has always been a constant debate as to which analysis is better, but to tell you thetruth, you need to know a little bit of both. So let’s break each one down and then come back and put them together. Fundamental AnalysisFundamental analysis is a way of looking at the market through economic, social and political forces that affect supply and demand. In other words, you look at whose economy is doing well, and whose economy sucks. The idea behind this type of analysis is that if a country’s economy is doing well, their currency will also be doing well. This is because the better a country’s economy, the more trust other countries have in that currency. For example, the U.S. dollar has been gaining strength because the U.S. economy is gaining strength. As the economy gets better, interest rates get higher to control inflation and as a result, the value of the dollar continues to increase. In a nutshell, that is basically what fundamental analysis is. Later on in the course you will learn which specific news events drive currency prices the most. For now, just know that the fundamental analysis of the Forex is a way of analyzing a currency through the strength of that country’s economy.Technical AnalysisThe most IMPORTANT thing you will ever learn in technical analysis is the trend! Many, many, many, many, many, many people have a saying that goes, “The trend is your friend”. The reason for this is that you are much more likely to make money when you can find a trend and trade in the same direction. Technical analysis can help you identifythese trends in its earliest stages and therefore provide you with very profitable tradingopportunities. Now I know you’re thinking to yourself, “Geez, these guys are smart. They use crazy words like "technical" and "fundamental" analysis. I can never learn this stuff!” Don't worry yourself too much. After you're done with the School of Pipsology, you too will be just as....uhmmm..."smart?" as us.So which type of analysis is better?Ahh, the million dollar question. Throughout your journey as an aspiring Forex trader you will find strong advocates for both fundamental and technical trading. You will have those who argue that it is the fundamentals alone that drive the market and that any patterns found on a chart are simply coincidence. On the other hand, there will be those who argue that it is the technicals that traders pay attention to and because traders pay attention to it, common market patterns can be found to help predict future price movements. Do not be fooled by these one sided extremists! One is not better than the other... Technical analysis is the study of price movement. In one word, technical analysis = charts. The idea is that a person can look at historical price movements, and, based on the price action, can determine at some level where the price will go. By looking at charts, you can identify trends and patterns which can help you find good trading opportunities. In order to become a true Forex master you will need to know how to effectively use both types of analysis. Don't believe me? Let me give you an example of how focusing on only one type of analysis can turn into a disaster.• Let’s say that you’re looking at your charts and you find a good trading opportunity. You get all excited thinking about the money that’s going to be raining down from the sky. You say to yourself, “Man, I’ve never seen a more perfect trading opportunity. I love my charts.”• You then proceed to enter your trade with a big fat smile on your face (the kind where all your teeth are showing).

:: Some Defination in Forex

Ask Price ¨C Sometimes called the Offer Price, this is the market price for traders to buy currencies. Ask Prices are shown on the right side of a quote ¨C e.g. EUR/USD 1.1965 / 68 ¨C means that one euro can be bought for 1.1968 UD dollars.Bar Chart ¨C A type of chart used in Technical Analysis. Each time division on the chart is displayed as a vertical bar which show the following information ¨C the top of the bar is the high price, the bottom of the bar is the low price, the horizontal line on the left of the bar shows the opening price and the horizontal line on the right of bar shows the closing price.Base Currency ¨C is the first currency in a currency pair. A quote shows how much the base currency is worth in the quote (second) currency. For example, in the quote - USD/JPY 112.13 ¨C US dollars are the base currency, with 1 US dollar being worth 112.13 Japanese yen.Bid Price ¨C is the price a trader can sell currencies. The Bid Price is shown on the left side of a quote - e.g. EUR/USD 1.1965 / 68 ¨C means that one euro can be sold for 1.1965 UD dollars.Bid/Ask Spread ¨C is the difference between the bid price and the ask price in any currency quotation. The spread represents the broker's fee, and varies from broker to broker.Broker ¨C the intermediary between buyer and seller. Most FOREX brokers are associated with large financial institutions and earn money by setting a spread between bid and ask prices.Candlestick Chart - A type of chart used in Technical Analysis. Each time division on the chart is displayed as a candlestick ¨C a red or green vertical bar with extensions above and below the candlestick body. The top of the extension shows the highest price for the chart division and the bottom of the extension shows the lowest price. Red candlesticks indicate a lower closing price than opening price, and green candlesticks indicate the price is rising.Cross Currency ¨C A currency pair that does not include US dollars ¨C e.g. EUR/GBP.Currency Pair ¨C Two currencies involved in a FOREX transaction ¨C e.g. EUR/USD.Economic Indicator ¨C A statistical report issued by governments or academic institutions indicating economic conditions within a country.First In First Out (FIFO) ¨C refers to the order open orders are liquidated. The first orders to be liquidated are the first that were opened.Foreign Exchange (FOREX, FX) ¨C Simultaneously buying one currency and selling another.Fundamental Analysis ¨C Analysis of political and economic conditions that can affect currency prices.Leverage or Margin ¨C The ratio of the value of a transaction to the required deposit. A common margin for FOREX trading is 100:1 ¨C you can trade currency worth 100 times the amount of your deposit.Limit Order ¨C An order to buy or sell when the price reaches a specified level.Lot ¨C The size of a FOREX transaction. Standard lots are worth about 100,000 US dollars.Major Currency ¨C The euro, German mark, Swiss franc, British pound, and the Japanese yen are the major currencies.Minor Currency ¨C The Canadian dollar, the Australian dollar, and the New Zealand dollar are the minor currencies.One Cancels the Other (OCO) ¨C Two orders placed simultaneously with instructions to cancel the second order on execution of the first.Open Position ¨C An active trade that has not been closed.Pips or Points ¨C The smallest unit a currency can be traded in.Quote Currency ¨C The second currency in a currency pair. In the currency pair USD/EUR the euro is the quote currency.Rollover ¨C Extending the settlement time of spot deals to the current delivery date. The cost of rollover is calculated using swap points based on interest rate differentials.Technical Analysis ¨C Analysis of historical market data to predict future movements in the market.Tick ¨C The minimum change in price.Transaction Cost ¨C The cost of a FOREX transaction ¨C typically the spread between bid and ask prices.Volatility ¨C A statistical measure indicating the tendency of sharp price movements within a period of time.

:: How to Make Forex Order.

There are some basic order types that all brokers provide and some others that soundweird. The basic ones are:• Market orderA market order is an order to buy or sell at the current market price. For example,EUR/USD is currently trading at 1.2140. If you wanted to buy at this exact price, you would click buy and your trading platform would instantly execute a buy order at that exact price. If you ever shop on Amazon.com, it's (kinda) like using their 1-Click ordering. You like thecurrent price, you click once and it's yours! The only difference is you are buying or selling one currency against another currency instead of buying Britney Spears CDs.• Limit orderA limit order is an order placed to buy or sell at a certain price. The order essentially contains two variables, price and duration. For example, EUR/USD is currently trading at 1.2050. You want to go long if the price reaches 1.2070. You can either sit in front of your monitor and wait for it to hit 1.2070 (at which point you would click a buy market order), or you can set a buy limit order at 1.2070 (then you could walk away from your computer to attend your ballroom dancing class). If the price goes up to 1.2070, your trading platform will automatically execute a buy order at that exact price. You specify the price atwhich you wish to buy/sell a certain currency pair and also specify how long you want the order to remain active (GTC or GFD).• Stop-loss orderA stop-loss order is a limit order linked to an open trade for the purpose of preventing additional losses if price goes against you. A stop-loss order remains in effect until the position is liquidated or you cancel the stop-loss order. For example, you went long (buy) EUR/USD at 1.2230. To limit your maximum loss, you set a stop-loss order at 1.2200. This means if you were dead wrong and EUR/USD drops to 1.2200 instead of moving up, your trading platform would automatically execute a sell order at 1.2200 and close out your position for a 30 pip loss (eww!). Stop-losses are extremely useful if you don't want to sit in front of your monitor all day worried that you will lose all your money. You can simply set a stop-loss order on any open positions so you won't miss your basket weaving class.• GTC (Good ‘til canceled)A GTC order remains active in the market until you decide to cancel it. Your broker will not cancel the order at any time. Therefore it's your responsibility to remember that you have the order scheduled.• GFD (Good for the day)A GFD order remains active in the market until the end of the trading day. Because foreign exchange is a 24-hour market, this usually means 5pm EST since that that's U.S. markets close, but I’d recommend you double check with your broker.• OCO (Order cancels other)An OCO order is a mixture of two limit and/or stop-loss orders. Two orders with price and duration variables are placed above and below the current price. When one of the orders is executed the other order is canceled. Example: The price of EUR/USD is 1.2040. You want to either buy at 1.2095 over the resistance level in anticipation of a breakout or initiate a selling position if the price falls below 1.1985. The understanding is that if 1.2095 is reached, you will buy order will be triggered and the 1.1985 sell order will be automatically canceled.

:: The Advantage of Forex

There are many benefits and advantages to trading Forex. Here are just a few reasons whyso many people are choosing this market:• No commissions.No clearing fees, no exchange fees, no government fees, no brokerage fees. Brokers are compensated for their services through something called the bid-ask spread. • No middlemen.Spot currency trading eliminates the middlemen, and allows you to trade directly with the market responsible for the pricing on a particular currency pair.• No fixed lot size.In the futures markets, lot or contract sizes are determined by the exchanges. A standard-size contract for silver futures is 5000 ounces. In spot Forex, you determine your own lot size. This allows traders to participate with accounts as small as $250 (although we explain later why a $250 account is a bad idea).• Low transaction costs.The retail transaction cost (the bid/ask spread) is typically less than 0.1 percent under normal market conditions. At larger dealers, the spread could be as low as .07 percent. Of course this depends on your leverage and all will be explained later.• A 24-hour market.There is no waiting for the opening bell - from Sunday evening to Friday afternoon EST, the Forex market never sleeps. This is awesome for those who want to trade on a part-time basis, because you can choose when you want to trade--morning, noon or night.• No one can corner the market.The foreign exchange market is so huge and has so many participants that no single entity (not even a central bank) can control the market price for an extended period of time.• Leverage.In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make nice profits, and at the same time keep risk capital to a minimum. For example, Forex brokers offer 200 to 1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies. Similarly, with $500 dollars, one could trade with $100,000 dollars and so on. But leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains.• High Liquidity.Because the Forex Market is so enormous, it is also extremely liquid. This means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell at will. You are never "stuck" in a trade. You can even set your online trading platform to automatically close your position at your desired profit level (a limit order), and/or close a trade if a trade is going against you (a stop loss order).• Free “Demo” Accounts, News, Charts, and Analysis.Most online Forex brokers offer 'demo' accounts to practice trading, along with breaking Forex news and charting services. All free! These are very valuable resources for “poor” and SMARTtraders who would like to hone their trading skills with 'play' money before opening a live trading account and risking real money.• “Mini” and “Micro” Trading:You would think that getting started as a currency trader would cost a ton of money. The fact is, compared to trading stocks, options or futures, it doesn't. Online Forex brokers offer "mini" and “micro” trading accounts, some with a minimum account deposit of $300 or less. Now we're not saying you should open an account with the bare minimum but it does makes Forex much more accessible to the average (poorer) individual who doesn't have a lot of start-up trading capital.

:: How to trade in Forex.

The FX market, you buy or sell currencies. Placing a trade in the foreign exchange market is simple: the mechanics of a trade are very similar to those found in other markets (like the stock market), so if you have any experience in trading, you should be able to pick it up pretty quickly.The object of Forex trading is to exchange one currency for another in the expectation that the price will change, so that the currency you bought will increase in value compared to the one you sold.Example of making money by buying EurosTrader's Action EUR USD You purchase 10,000 euros at the EUR/USD exchange rate of 1.18Two weeks later, you exchange your 10,000 euros back into US dollars at the exchange rate of 1.2500.you earn a profit of $700. 0 +700EUR $10,000 x 1.18 = US $11,800EUR $10,000 x 1.25 = US $12,500An exchange rate is simply the ratio of one currency valued against another currency. For example, the USD/CHF exchange rate indicates how many U.S. dollars can purchase one Swiss franc, or how many Swiss francs you need to buy one U.S. dollar. How to Read an FX Quote Currencies are always quoted in pairs, such as GBP/USD or USD/JPY. The reason they are quoted in pairs is because in every foreign exchange transaction you are simultaneously buying one currency and selling another. Here is an example of a foreign exchange rate for the British pound versus the U.S. dollar:GBP/USD = 1.7500The first listed currency to the left of the slash ("/") is known as the base currency (in this example, the British pound), while the second one on the right is called the counter or quote currency (in this example, the U.S. dollar). When buying, the exchange rate tells you how much you have to pay in units of the quote currency to buy one unit of the base currency. In the example above, you have to pay 1.7500 U.S. dollar to buy 1 British pound. When selling, the exchange rate tells you how many units of the quote currency you get for selling one unit of the base currency. In the example above, you will receive 1.7500 U.S. dollars when you sell 1 British pound. The base currency is the “basis” for the buy or the sell. If you buy EUR/USD this simplymeans that you are buying the base currency and simultaneously selling the quote currency.You would buy the pair if you believe the base currency will appreciate (go up) relative to the quote currency. You would sell the pair if you think the base currency will depreciate (go down) relative to the quote currency.Long/ShortFirst, you should determine whether you want to buy or sell. If you want to buy (which actually means buy the base currency and sell the quote currency), you want the base currency to rise in value and then you would sell it back at a higher price. In trader's talk, this is called "going long" or taking a "long position". Just remember: long = buy.If you want to sell (which actually means sell the base currency and buy the quote currency), you want the base currency to fall in value and then you would buy it back at a lower price. This is called "going short" or taking a "short position". Short = sell. Bid/Ask SpreadAll Forex quotes include a two-way price, the bid and ask. The bid is always lower than the ask price. The bid is the price in which the dealer is willing to buy the base currency in exchange for the quote currency. This means the bid is the price at which you (as the trader) will sell. The ask is the price at which the dealer will sell the base currency in exchange for the quote currency. This means the ask is the price at which you will buy. The difference between the bid and the ask price is popularly known as the spread. Let's take a look at an example of a price quote taken from a trading platform:On this GBP/USD quote, the bid price is 1.7445 and the ask priceis 1.7449. Look at how this broker makes it so easy for you totrade away your money.If you want to sell GBP, you click "Sell" and you will sell poundsat 1.7445. If you want to buy GBP, you click "Buy" and you willbuy pounds at 1.7449.In the following examples, we're going to use fundamental analysis to help us decide whether to buy or sell a specific currency pair. If you always fell asleep during your economics class or just flat out skipped economics class, don’t worry! We will cover fundamental analysis in a later lesson. For right now, try to pretend you know what’s going on…EUR/USDIn this example Euro is the base currency and thus the “basis” for the buy/sell. If you believe that the US economy will continue to weaken, which is bad for the US dollar, you would execute a BUY EUR/USD order. By doing so you have bought euros in the expectation that they will rise versus the US dollar. if you believe that the US economy is strong and the euro will weaken against the US dollar you would execute a SELL EUR/USD order. By doing so you have sold Euros in the expectation that they will fall versus the US dollar.USD/JPYIn this example the US dollar is the base currency and thus the “basis” for the buy/sell. If you think that the Japanese government is going to weaken the Yen in order to help its export industry, you would execute a BUY USD/JPY order. By doing so you have bought U.S dollars in the expectation that they will rise versus the Japanese yen. If you believe that Japanese investors are pulling money out of U.S. financial markets and converting all their U.S. dollars back to Yen, and this will hurt the US dollar, you would execute a SELL USD/JPY order. By doing so you have sold U.S dollars in the expectation that they will depreciate against the Japanese yen.GBP/USDIn this example the GBP is the base currency and thus the “basis” for the buy/sell. If you think the British economy will continue to do better than the United States in terms of economic growth, you would execute a BUY GBP/USD order. By doing so you have bought pounds in the expectation that they will rise versus the US dollar. If you believe the British's economy is slowing while the United State's economy remains strong like bull, you would execute a SELL GBP/USD order. By doing so you have sold pounds in the expectation that they will depreciate against the US dollar.USD/CHFIn this example the USD is the base currency and thus the “basis” for the buy/sell. If you think the Swiss franc is overvalued, you would execute a BUY USD/CHF order. By doing so you have bought US dollars in the expectation that they will appreciate versus the Swiss Franc. If you believe that the US housing market bubble burst will hurt future economic growth, which will weaken the dollar, you would execute a SELL USD/CHF order. By doing so you have sold US dollars in the expectation that they will depreciate against the Swiss franc. I don't have enough money to buy $10,000 euros. Can I still trade?You can with margin trading! Margin trading is simply the term used for trading with borrowed capital. This is how you're able to open $10,000 or $100,000 positions with as little as $50 or $1,000. You can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital. Margin trading in the foreign exchange market is quantified in “lots”. For now, just think of the term "lot" as the minimum amount of currency you have to buy. When you go to the grocery store and want to buy an egg, you can't just buy a single egg; they come in dozens or "lots" of 12. In Forex, it would be just as foolish to buy or sell $1 EUR, so they usually come in "lots" of $10,000 or $100,000 depending on the type of account you have.For Example:• You believe that signals in the market are indicating that the British Pound will go upagainst the US Dollar.• You open 1 lot ($100,000) for buying the Pound with a 1% margin at the price of1.5000 and wait for the exchange rate to climb. This means you now control $100,000worth of British Pound with $1,000. Your predictions come true and you decide tosell.• You close the position at 1.5050. You earn 50 pips or about $500. (A pip is thesmallest price movement available in a currency). So for an initial capital investmentof $1,000, you have made 50% return. Return equals your $500 profit divided by your$1,000 you risked to trade.Your Actions GBP USDYour MoneyYou buy 100,000 pounds at the GBP/USD exchangerate of 1.5000+100,000 -150,000 $1,000You blink for two seconds and the GBP/USDexchange rate rises to 1.5050 and you sell.-100,000 +150,500** $1,500You have earned a profit of $500. 0 +500When you decide to close a position, the deposit that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.

:: Forex Risk Management

FOREX trading is risky. Anyone who is contemplating FOREX trading should understand the following:THE RISK OF LOSS IN TRADING FOREX CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. FOREX TRADING IS NOT SUITABLE FOR EVERYONE.
ALWAYS TRADE WITH RISK CAPITAL, THAT IS, MONEY THAT YOU CAN AFFORD TO LOSE.
LEVERAGE CAN WORK FOR YOU OR AGAINST YOU. If you are trading with high leverage, then even a small move against your position may result in a large loss, including the loss of your entire initial deposit. And keep in mind that the market can always move against you. No one can predict prices with certainty.
The trading system could break down. If you are using an Internet-based or other electronic system to place trades, some part of the system could fail. In the event of a system failure, it is possible that, for a certain time period, you may not be able to enter new orders, execute existing orders, or modify or cancel orders that were previously entered. A system failure may also result in loss of orders or order priority.
In the FOREX market, you are relying on the creditworthiness and reputation of the other party to the transaction. FOREX trades are not guaranteed by a clearing organization. Furthermore, funds that you have deposited to trade FOREX may not be insured or receive a priority in bankruptcy.

:: Getting Started in Forex

The forex (FX) market has many similarities to the equity markets; however, there are some key differences. This article will show you those differences and help you get started in forex trading.
Choosing a Broker There are many forex brokers to choose from, just as in any other market. Here are some things to look for:
Low Spreads - The spread, calculated in "pips", is the difference between the price at which a currency can be purchased and the price at which it can be sold at any given point in time. Forex brokers don't charge a commission, so this difference is how they make money. In comparing brokers, you will find that the difference in spreads in forex is as great as the difference in commissions in the stock arena. Bottom line: Lower spreads save you money!
Quality Institution - Unlike equity brokers, forex brokers are usually tied to large banks or lending institutions because of the large amounts of capital required (leverage they need to provide). Also, forex brokers should be registered with the Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). You can find this and other financial information and statistics about a forex brokerage on its website or on the website of its parent company. Bottom line: Make sure your broker is backed by a reliable institution!
Extensive Tools and Research - Forex brokers offer many different trading platforms for their clients - just like brokers in other markets. These trading platforms often feature real-time charts, technical analysis tools, real-time news and data, and even support for trading systems. Before committing to any broker, be sure to request free trials to test different trading platforms. Brokers usually also provide technical and fundamental commentaries, economic calendars and other research.

:: What is a PIP?

You will constantly see ads for "No Commission" trading - and then they promptly boast their low PIP spreads... But do you have any idea what a PIP actually is?
As Forex Trading there are no exchanges, a PIP is a fancy way of charging you an exchange fee, and saying that you don't have any commissions. Just know this - the Forex firms are not non-profit organizations, so one way or another, they are going to make their money. The best thing to know is that a PIP is their take of the money - and be aware of how they're calculated. The below information explains how to calculate point price (PIP):
All currency pairs can be subdivided into three logical groups - pairs with direct quote (EURUSD, GBPUSD), pairs with inverse quote (USDJPY, USDCHF), and cross rates (GBPCHF, EURJPY etc.).
The pip price for currency pairs with direct quote is calculated according to the following formula
[pip] = [lot size] × [tick size] where [tick size] - is the smallest possible change in price, for example for USDCHF and EURUSD it's 0.0001. For currency pairs with direct quote the pip price is constant.Example.EURUSD. Lot size is 100,000, tick - 0.0001. [pip] = 100000 * 0.0001 = $10.00
For currency pairs with inverse quote:
[pip] = [lot size] × [tick size] / [current quote] For currency pairs with inverse quote the pip price varies depending on the current quote.Example.USDJPY. Lot size is 100,000, tick - 0.01. If current quote is 129.20, [pip] = 100000 * 0.01 / 129.20 = $7.74
For cross rates:
[pip] = [lot size] × [tick size] × [base quote] / [current quote] where [base quote] - the current base pair quote.Example.GBPCHF. The lot size is J62500; if the current quote is 2.3000 and the base GBPUSD quote is 1.4550, [pip] = 62500 * 0.0001 * 1.4550 / 2.3000 = $3.95.

:: What is the Difference between Forex and Futures?

Highly Trending marketsBecause the foreign exchange market does not close, it isn't dramatically impacted by buying programs and cannot be easily manipulated, the Forex market offers some of the smoothest trends available in any market. No other market can come close to the amount of monetary volume and participation as the Forex market making it a haven for traders not having to deal with gaps and price movements, erratic spikes and other choppy market conditions more commonly experienced in the futures markets.
No CommissionsThough some speculators are unaware, ALL financial markets have a spread (the difference between the bid and ask price). In the futures market you are not only paying the spread, but you are also paying commission charges, clearing and exchange fees on top of the spread. Ticker prices in the Futures market typically signify the last traded price, not the price at which you will be filled. In the Forex market, you are paying what's referred to as a PIP or PIP spread. In plain English, as best we can interpret, what you are paying is the difference between the bid and the ask price. The retail forex market is very loosely regulated, so the way a lot of brokerage firms make their money is to trade the accounts between other accounts within their firm. By doing this, you are eliminating an exchange that would add fees to your trades. You are still getting your bid or ask price, there just isn't someone running to the floor as it's all done internally.
Better LeverageTrading in the spot currency markets provides advantages over trading currency futures contracts. One of the main advantages for traders trading spot currencies is the margin rate or leverage that clients are given. In spot currency trading customers receive one low margin rate for trades done 24 hours a day. In currency futures trading the client has one margin rate for "day" trades and one margin rate for "overnight" positions. This can become a hassle for traders and decreases the overall tradability of the currency futures markets. Margin rates in spot currency trading vary from around 1% to 5% depending on the size of transactions a particular trader initiates.
24-hour TradingSince the Forex market, in a sense, "follows the sun" around the globe the market rarely experiences periods of illiquidity. What this means is that any trader in any time zone can trade Forex at any time during the day or night! You no longer have to wait for the market to open when news has already hit the streets or have to stop trading because the CME, CBOT or other American futures pits have closed for the day. This gives the Forex trader added flexibility and continuous market opportunities that just aren't available in futures. To explain the global effect on the Forex market, there are three main economic zones that are linked throughout the world. For instance, when the Pacific Rim markets such as Japan and Singapore begin to slow, the European markets of England, Switzerland and Germany begin, followed by the North American markets of the United States, Canada and Mexico. As the North American markets begin to slow down for the evening, the Pacific Rim starts their trading day. This example shows that you are no longer limited to trading the comparatively short trading day offered by US markets alone.

:: The History of Forex

The Foreign Exchange market, ("FX or Forex") as we know it today, originated in 1973. However, money has been around in one form or another since the time of Pharaoh. The Babylonians are credited with the first use of paper bills, and receipts. Middle eastern moneychangers were the first currency traders exchanging coins of one culture for another. During the middle ages, the need for another form of currency besides coins emerged as the method of choice. These paper bills represented transferable third party payments of funds; this made foreign exchange much easier for merchants and traders and caused the regional economies to flourish.
From the infantile stages of Forex during the Middle Ages to WWI, the Forex markets were relatively stable and without much speculative activity. After WWI the Forex Markets became very volatile and speculative activity increased ten fold. Speculation in the Forex market was not looked on as favorable by most institutions and the public in general. The Great Depression and the removal of the gold standard in 1931 created a serious lull in Forex activity. From 1931 until 1973, the Forex market went through a series of changes. These changes greatly impacted the global economies at the time. Speculation in the Forex markets during these times was little if any.
The Bretton Woods Accord
The first major transformation, the Bretton Woods Accord, occurred toward the end of World War II. The United States, Great Britain and France met at the United Nations' Monetary and Financial Conference in Bretton Woods, New Hampshire to design a new economic order. This location in the U.S. was chosen because, at the time, was the only country unscathed by war. Most of the European countries were in shambles. Up until WWII, Great Britain and the British Pound had been the major currencies by which most currencies were compared. This changed when the Nazi campaign against Britain included a major counterfeiting effort against its currency. In fact, WWII vaulted the US dollar from a has been currency after the stock market crash of 1929 to the benchmark by which most currencies were compared. The Bretton Woods Accord was established to create a stable environment by which global economies could re-establish themselves. The Bretton Woods Accord established the pegging of currencies and the International Monetary Fund ("IMF") in hopes of stabilizing the global economic situation.

:: What Is Forex Trading?

With the advent of FX currency futures, a lot of people get confused by the currency futures contracts, and the spot fx markets. Although the Chicago Mercantile Exchange does a great job of having its FCM's publicize their currency futures - Forex is actually in reference to the spot fx markets. Below is a fairly common write-up explaing what Forex is all about. brokerage firm probably has something similar to this - so please check multiple sources.

The Spot Forex Market is a 24-hour international market where banks, hedge funds, international corporations, and individuals from all over the world are active participants. The sheer scope of market participation and volume of activity insures around-the-clock activity making this an ideal market for trading at all times.

Currencies have the tendency to trend heavily and rarely spend much time in tight trading ranges. These two characteristics are central for short to medium term trading. On a daily basis, traders can easily identify new trends and breakouts providing multiple opportunities to exit and enter positions.

The Foreign Exchange market allows positions to be leveraged 200:1, providing tremendous upside potential. This means with $1000 margin deposit you can place a $200,000 position in the market. Spot Foreign Exchange provides much better leverage then the futures market, which requires a 2%-5% margin and the equities market, which requires at least 50% initial margin. A 1% movement in the FX market can triple the value of your entire investment. Leverage is a double-edged sword, and without proper risk management, the market can move against you and cause the lost of initial investment.

In the Foreign Exchange market there are no restrictions on short selling, which means that a trader can take advantage of an upward or downward market. Traders can buy or sell a currency with equal ease.