What
the FOREX Market is all about
FOREX
is the acronym for the Foreign Exchange, where one
countries currency is exchanged for that of another
through a floating exchange rate system. It is the
world's largest financial market, with an estimated
daily average turnover in upwards of 3 trillion
dollars!
FOREX trading is not bound to any one trading floor
and is not a market in the traditional sense, because
there is no central exchange. Instead, the entire
market is run electronically, between a network
of banks worldwide, continuously over a 24 hour
period. The market initially opens on Sunday at
2 PM (EST) and goes until Friday afternoon at 4:30
PM (EST).
Major foreign exchange participants include commercial,
investment banks and central banks. Other participants
include corporations, hedge funds and millions of
traders worldwide. The top seven banks that provide
liquidity in this market include: Bank of America,
Credit Suisse First Boston, Goldman Sachs, HSBC,
J.P. Morgan Chase, Morgan Stanley DW and UBS Warburg.
As
times change and many individual investors begin
looking for an alternative to the stock market,
the FOREX market is growing every day, with average
daily volumes hundred times larger than that of
the US Stock Market. Now more than ever the FOREX
market will play a key role in the wealth creation
of tomorrow.
Benefits
of trading the FOREX
Here are just a few of many benefits associated
with trading the FOREX:
Currency
Pairs
While there are many currencies available to trade,
PremiereTrade FOREX Alerts focus on a limited number
of pairs due to their stability and higher trading
volumes. The following currencies are part of the
PremiereTrade FOREX Alerts:
| EUR/USD
|
EURO-US
Dollar |
| GBP/USD
|
British
Pound-US Dollar |
| USD/CHF
|
US
Dollar-Swiss Franc |
| USD/JPY
|
US
Dollar-Japanese Yen |
| USD/CAD
|
US
Dollar-Canadian Dollar |
| USD/AUD
|
US
Dollar-Australian Dollar |
| NZD/USD
|
New
Zealand Dollar- US Dollar |
| EUR/JPY |
Euro
Dollar-Japanese Yen |
| EUR/GBP
|
Euro
Dollar-British Pound |
| EUR/AUD
|
Euro
Dollar-Australian Dollar |
| EUR/CHF
|
Euro
Dollar-Swiss Franc |
| GBP/JPY
|
British
Pound-Japanese Yen |
Understanding
a Currency Pair
As you
may have noticed above, currencies are displayed
as a pair (EUR/USD). An easy way
to remember which currency is the base currency
is to look at how they are displayed. The base currency
is the first out of the two and is the currency
that is displayed on charts. The base currency like
the EUR in EUR/USD is increasing
in value when the charts are in an upward trend
and decreasing in value when charts are trending
downwards. However while these currencies are increasing
in value, they do so in conjunction with another
currency. Therefore if the EUR/USD
goes up in price, then the EUR is getting stronger
against the US dollar, and it takes more US dollars
to equal a Euro. The same thing is true in reverse
if the EUR/USD goes down.
*Leverage Disclosure:
Without proper risk management, a high degree of leverage can lead to large losses as well as gains.
