Archive for June, 2008
Forex Daily Analysis – June 26rd 2008
Yesterday’s economic data from the US were mostly mixed. Existing Home Sales and Unemployment Claims went in opposite directions. Since the Non-farm payrolls data is due next week, the market is concentrating on employment information, hence the disappointing Unemployment Claims figure hurt the US dollar. Today’s traders will see the Revised Michigan Sentiment, Personal Spending,
Forex Daily Analysis – June 23rd 2008
Starting a new week, we can see that the economic calendar is full with events. The Federal Reserve’s interest rate decision is the highlight of this week. It will happen on Wednesday, 18:15 GMT. The American interest rate is widely expected to be left untouched, but Ben Bernanke’s statement might shake the markets, which expect
Forex Daily Analysis – June 20th 2008
The British pound leaped 50 pips after the retail sales surged higher surprisingly. The market had expected a 0.1 drop, and was surprised to hear about a whooping 3.5 percent, the highest in 22 years. In Switzerland, the central bank met expectations by keeping the interest rate at 2.75%. The decision came despite inflation worries.
Forex Market Basic Features
The Forex market is unique, and has many interesting characteristics. This post lists all of them, and gives quick links to more elaborate information: Continuous Trading Information is available instantly, all the time High liquidity and High volume Globalization without Geography Low Trading Costs Large Leverage Influence and foul play are impossible Conclusion Those were
Continuous Trading in the Forex market
The Forex market operates 24 hours a day. This is possible since trading happens on all continents. This continuity is unique, and it allows dealers to act without any time limits, to react to any development that occurs in another place on the globe. For some traders who are not experienced, this might be very
Information is available instantly, all the time
Fresh economic information, and regular news affect the Forex market instantly. Sharp moves in currency pairs can be seen as the news breaks out. Quote information is transferred electronically through multinational companies such as Reuters, Bloomberg, and many more. Financial news passes through television, radio, and of course, the internet. This real time behavior (almost)
High liquidity and High volume
The daily volume in the Forex market is estimated at 3 trillion dollars! This inconceivable figure is slowly on the rise. This astonishing number (3,000 billion) is divided between deals intended for payments related to import and export, and investment deals. These investment deals (or speculation) are 95% of the flow in the market. This
Globalization without Geography
Contrary to stock markets and other markets, geography doesn’t play a role in the Forex market. Anyone can trade anywhere. London, Tokyo and New York City are major financial hubs. True, during the afternoon in London, when it’s morning time in New York, trading volume is highest, but trading is available around the clock. As
Low Trading Costs in the Forex Market
The aforementioned high volume and liquidity brought to high competition between trade vendors. Intense competition lowered the spreads between selling and buying prices. These spreads, or margins, is the cost of the deals, and the profits of the trading agencies. The cost is one of the lowest in the international financial markets, compared to the
Large Leverage in the Forex Market
There’s a very high volume and high liquidity in the Forex market. This draws many banks, investment houses and brokers into the market, thus creating competition. And, since there’s a high volume, open positions can be closed at almost any market condition. Trading agencies can offer their customers very high leverages, something that is uncommon