A country's exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that particular currency relative to other currencies. Thus, floating exchange rates change freely and are determined by trading in the forex market. This is in contrast to a "fixed exchange rate" regime. |||In some instances, if a currency value moves in any one direction at a rapid and sustained rate, central banks intervene by buying and selling its own currency reserves (i.e. Federal Reserve in the U.S.) in the foreign-exchange market in order to stabilize the local currency. However, central banks are reluctant to intervene, unless absolutely necessary, in a floating regime.
A point when traders shift from having more long positions to having more short positions. |||This can be a very effective tool for determining the trend of a certain currency. A shift from long to short positions indicates that the market's bullish outlook on a specific currency could be coming to an end.
The type of account a forex trader opens with a retail forex broker. Forex accounts come in many forms, but the first that is opened is often the forex demo account. |||After the trader has tried out demo accounts with a few different dealers, a funded account would be the next step. Mini accounts, full accounts and managed accounts are the most common types of funded accounts. Mini accounts are similar to full accounts except that currency is traded in lots of 10,000 rather than 100,000. This allows for lower mandatory initial deposits and greater customization of risk management. Is is important for currency traders to consider what they want to get out of their accounts before deciding on the type to open. Demo accounts and mini accounts are great for the retail forex trader to learn a profitable system and get used to the broker's execution methods. For currency speculators who doesn't want to trade themselves, a managed account may be a better option.
The market in which currencies are traded. The forex market is the largest, most liquid market in the world with an average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world. Watch: Forex Market Basics |||There is no central marketplace for currency exchange; trade is conducted over the counter. The forex market is open 24 hours a day, five days a week and currencies are traded worldwide among the major financial centers of London, New York, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris and Sydney.The forex is the largest market in the world in terms of the total cash value traded, and any person, firm or country may participate in this market.
1. The risk of an investment's value changing due to changes in currency exchange rates. 2. The risk that an investor will have to close out a long or short position in a foreign currency at a loss due to an adverse movement in exchange rates. Also known as "currency risk" or "exchange-rate risk". |||This risk usually affects businesses that export and/or import, but it can also affect investors making international investments. For example, if money must be converted to another currency to make a certain investment, then any changes in the currency exchange rate will cause that investment's value to either decrease or increase when the investment is sold and converted back into the original currency.
An electronic document that provides information on forex trading for free or for a fee. A forex ebook generally provides value to a trader by providing general information on strategies, signals, systems and promotional material. |||Given the inherent complexity of the foreign currency market, eBooks are becoming one of the most popular methods of learning by for who are just getting started in trading forex. It is important to note that forex eBooks range in quality, so it is wise to only pay for an eBook from sources you trust. Here are a few things to consider when looking for a good forex eBook:- Who is the author? Is this person respected in the trading community? What is the author's background?- What is the purpose of the eBook? Is it meant to educate, or to sell a product?
A national association of wholesale foreign exchange professionals dealers, brokers and treasury managers. The primary objectives of a forex club are education and networking for its members. Watch: Forex Market Basics |||A national forex club is generally affiliated to Paris-based ACI The Financial Markets Association, an umbrella organization for wholesale financial market professionals. ACI was founded in 1955.
A charting package that allows a trader to view historical currency exchange rates. Currency charts are provided within forex charting software, which usually comes free of charge when a trading account is opened with a forex broker. As with charts used for trading other securities, like stocks or futures, they are used primarily by the technical analyst, or chartist. |||Which forex charting software provides the best charts of foreign currencies? Because the software from each forex broker is so different, the answer is very personal. Most forex brokers allow you to open a demo account prior to funding a full account or mini account. Be sure to try out each broker's charting software during their trial periods to help you better decide which broker is the best for you.