Forex, FX and the Forex market are some common abbreviations for the Foreign Exchange market. Actually it is the largest financial market in the world, where money is sold and bought freely. In its present condition the Forex market was launched in the seventies, when free exchange rates were introduced, and only the participants of the market determine the price of one currency against the other proceeding from demand and supply. As far as the freedom from any external control and free competition are concerned, the Forex market is a perfect market.
With a daily turnover of over trillions of dollars, the Foreign Exchange market conducts more than three times the aggregate amount volume of the United States Equity and Treasury markets combined. The Forex market is an over-the-counter market where buyers and sellers conduct foreign exchange business using different means of communication.
Unlike other financial markets, the Forex market has no physical location or central exchange. Since the Forex market lacks a physical exchange, the market trades continuously on a 24-hour basis, moving from one time zone to the next, across each of the world’s major financial centers every day. Trillions of dollars of foreign exchange activity takes place every day. From 1997 to the end of 2000, daily forex trading volume surged approximately from US$5 billion to US$1.5 trillion and more (according to various recent studies it has touched $1.7 trillion per day and dwarfs all other markets for trading in size and volume). It is really difficult, if not impossible; to determine an absolutely exact number because trading is not centralized on an exchange. But one thing is for sure that the Forex market continues to grow at a phenomenal rate.
Before the advent of Internet and ecommerce, only big corporations, multinational banks and wealthy individuals could trade currencies in the Forex market through the use of the proprietary trading systems of banks. These systems required as much as US$1 million to open an account. Thanks to advancements in online technology, today investors with only a few thousand dollars can have access to the Forex market 24 hours a day and around 5 ½ days of a week.
The Forex market is a nonstop cash market where currencies of nations are traded, typically via brokers called forex brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets while traders increase or decrease value of an investment upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events so it is also considered to be a highly volatile and fragile market too. Conditions of the Forex market never remain the same they changes every second.
The foreign exchange market dwarfs the combined operations of the New York, London, and Tokyo futures and stock exchanges. According to its size and scope it is many times larger than all other markets. Stats shows that spot transactions and forward outright Forex trading take place in the inter-bank market. 51% of the market is in spot Forex transactions, followed by 32% in currency swap transactions. Forward outright Forex transactions represent another 5% of this daily turnover, with options on ‘interbank’ Forex transactions making up another 8%. Therefore the inter-bank market accounts for 96% of the global foreign exchange market, with the remaining 4% being divided among all the global futures exchanges.
For traders, Forex trading provides an alternative to stock market trading. While there are thousands of stocks to choose from, there are only a few major currencies to trade (the Dollar, Yen, British Pound, Swiss Franc, and the Euro are the most popular). Forex trading also provides a lot more leverage than stock trading, and the minimum investment to get started is a lot lower. Add to that the ability to choose flexible trading hours (forex trading goes on 24 hours a day) and you have the reason why so many stock traders have flocked to day trade currencies.
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I am having the same problem…I really would like it if the audio was synchronized with the video and didn’t break-up as bad as it does. To bad, this is valuable information from Perry…as usual.
Must be really good. I wish I could hear it. The sound is FUBAR. NO SOUND !!
It appears you have burned your fingers recently due to the reason of Bernanke's speech on inflation and slow growth. When you trade, that too forex, you have to follow different mechanism. Keep track of financial events at http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm
that will no way help you to improve your trade. Best forex trading requires you to close your trade with in half an hour or maximum on hour
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It mostly happens when a major institution makes a quick trade. Since the forex market is so vast, it's nearly impossible to predict these things. It could be a mid-sized Japanese bank, or even the Fed. Just stay out of the market while its happening (unless of course you're making tons of money on an open position).
I don't think you understand the concept of 'volatility'.
For example, the 10 day historic vol of the GBP on 16 July 1999 was 5.7%. Today (16 July 2009) it is 13.4%. I have no idea where you get the idea that there is no volatility in the forex market.
The last price of the VIX is 25.89 as at close of 15 July. A decade ago, on 15 July 1999 it was at 18.68. The world economy came out of the Asian crises where the VIX peaked at 45.75 on 10 August 1998. Again it went up to a new high of 80.86 on 20 November 2008.
As a general rule, volatility is highest running up and during a crises and will come down when the cises is coming to an end.
Completely Agree. It is a big party
Based on the way you phrase your question… I suggest you don't invest in FX. Take a year to learn this stuff. 90% of all the people that try FOREX…. FAIL! So far, you're on your way to be part of that 90%.
Not sure if others are having this problem, but sound is really off from the video and then it breaks up so I can’t hear it at all.
I have alerts set through my online brokerage, Banc of America Investment Services, set to send me emails when certain stocks hit certain prices, volumes, press releases, etc. I can also have it sent to my phone as a text message.
At one time, before I discovered the usefulness of text messages, I used the aforementioned email alerts sent to Outlook on my computer. Let's say VLO hit $75 where I had an alert set. Banc of America sent the alert to my gmail email address which was picked up by Outlook. When Outlook received the email it would beep and give me a pop up until I acknowledged the new email.
If your broker software doesn't have email or text alerts Morningstar has a similar feature on their website. I think you have to set up a free acct with them on their website.
I know that wasn't exactly what you were asking for but it might translate into what you are trying to do. Good luck!
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Tell him he had better not do that any more.
The market is open 24 hours a day from 5pm EST on Sunday until 4-5pm EST Friday. The reason that the markets are open 24 hours a day is that currencies are in high demand. The international scope of currency trading means that there are always traders somewhere who are making and meeting demands for a particular currency.
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I agree, great way of explaining the whole process!
The following schedule is based on Eastern Standard Time (GMT-5).
Forex market opens at 19:00 between Sunday and Thursday. Then at 21:00, Singapore and Hong Kong open. Between Sunday and Friday, European markets opens in Frankfurt at 2:00am. Then London opens at 3:00am. When Asian shift is almost finished, European markets are in full throttle at 16:00. At 7:00, European markets are almost finished. At 8:00, US market opens in New York. At 9:00am, New York Stock Exchange opens. At 17:00, Australia opens.
Forex market operates globally 24 hours a day, starting from the far east, in New Zealand (Wellington), passing the time zones in Sydney, Tokyo, Hong Kong, Singapore, Moscow, Frankfurt-on-Main, London, then finishing the day in New York and Los Angeles.
I like his style. Perry this is great.
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Keep your rule book nearby, set your stop losses and time of purchase and DO NOT change the rule. Yes there will be times when your emotion though will be right….but in the long run the logic moves will always tend to give better returns.
Another idea is to keep a copy of a trans gone really bad because of an emotion move rathre than the logical one nearby. whenever you are thinking of going over to the emotion side…..read the results of the bad trade.