Forex Major Pairs

Foreign exchange is the trading of currencies on the forex markets around the world. Most people may be familiar with the other financial markets in the world: The stock market, the bond market maybe even The Commodities Market, but fewer people actually know that these markets are dwarfed by the forex market. Yes, that’s actually the case. The forex market is 50 times bigger than the stock market and 15 times larger than the bonds market, but if the forex market is so large, why haven’t you as an investor been told about it? There are a few reasons for this. First of all, the forex market was not easy to trade on just a decade or two ago. Unlike the other financial markets there is no centralised exchange like the stock exchange. Instead, the forex market is purely an electronic market and exists only when someone makes a trade, but that is all the time. This market is called the Interbank market, because it is the internal market for banks all over the world. This means that if you want to trade forex, you must have access to the interbank market. Brokers are companies who have access to the Interbank market and with the growth of the internet, more and more brokers have moved their business online. Today, there are more than 100 hundred brokers available for online trading.

This has opened up the opportunity for individual traders to make money from trading forex online trough an online platform offered by their broker. A platform gives you access to trade any of the hundreds of currencies around the world. Traders make money by speculating in price changes of currency pairs. A forex pair is simply two currencies that you simoultaneously sell and buy. You always sell and buy currencies in pairs, because currencies are always valued against another currency, which makes sense if you think about it. So as a trader you can make money by both selling and buying currency and you can make money on price rises and price drops. This means you can make money no matter the market circumstances.

As mentioned there are more currencies available for trading than you can get your head around, but that doesn’t mean you should trade all of them. Most traders choose one or two pairs that they focus their attention on, because they will then better be able to know everything about what moves those currencies. Of course you can easily trade more currencies, but you should probably start out by only trading one. There are some pairs that are traded more than others, significantly more actually. These are called the Forex Major Currency Pairs and most forex traders trade these. Those that don’t usually trade what is known as ‘exotic forex pairs’. Let’s have a look at the Forex Major Pairs:

  • US Dollar/Japanese Yen (USD/JPY)
  • Euro/US Dollar (EUR/USD)
  • US Dollar/Swiss franc (USD/CHF)
  • British Pound/US Dollar (GBP/USD)

You can see that the USD is a part of all these pairs, which is because of it’s status as reserve currency. Each major forex pair responds to different events and requires a unique approach and strategy.

Foreign Exchange Currency Trading

This article will look at the foreign exchange currency trading basics. Forex is an abbreviation of Foreign Exchange and foreign exchange currency trading is the act of trading currencies on the forex market. As there is no physical market for forex, akin to the stock exchange, the forex market only exists when a currency is traded trough the banks Interbank market.

The forex market dwarfs all other markets in size. It’s larger and has more volume than all other financial markets put together. That’s saying something in the world of finance. It’s 50 times bigger than the equity market and 15 times larger than the bond market. The daily turnover on the forex market reaches almost 2 Trillion Dollars. With this much currency changing hands, the forex market is the closest thing to a ‘perfect’ market there is. This makes it a very attractive market to trade on for individual traders as the playing field is even. Big banks do not have an inherent advantage over the small trader.

Foreign exchange currency trading is popular because of it’s size and opportunity for quick profits, but the number on attraction for many traders is the possibility of leveraging trades over 100 times. Leveraging is trading with borrowed money with an initial deposit. This means that a $1000 deposit will allow you to trade for over $100,000. You won’t get much for $1000 on the stock exchange, but on the forex market your $1000 goes a long way if you use leverage.

Foreign exchange currency trading is a very popular and exiting way to make some extra money, trading from your home. Many traders are not formally educated in forex trading, but still make a nice additional income and some go on to become full time professional traders. Though forex trading is easy and exiting, you should never trade for money that you can’t afford to lose or trade if you can’t handle losses. There will be losses in forex trading, there’s no way to avoid that even for top traders.

Forex trading is a very exiting way to make money from home, it’s easy and simple to pick up, but you should never trade for more than you have budgeted or trade with money that you can not afford to lose. There will be winning sessions and there will be losing sessions and it’s very important to be able to handle both.

Another great thing about the forex market is that it’s open 24/7 and never closes. That means you have the freedom to trade whenever you like and won’t have to plan your day around your trades.

All forex brokers offer demo accounts for new clients. A demo account will allow you to trade with ‘play money’ but on real prices. This is recommended to learn the basics of trading before you try your hand with real money. When you are ready to trade with your own money, consider opening a mini account where you can trade for as little as $100.

Forex Futures Trading

The forex market, foreign exchange market, or just fx market is the market for currency exchange done trough the Interbank market. This is the place where all the world currencies are traded, but unlike the stock exchange there’s no actual physical marketplace. Yet, over 3 trillion dollars worth of currency changes hands ever day. A smaller percentage of that is done trough forex futures trading. This doesn’t mean there’s no money to be made from trading forex futures though.

Forex trading is done by buying and selling currencies against another. A currency is always valued against another so a transaction must always include simultaneously buying and selling two different currencies. The trader hopes that one of the currencies will increase in relative value so that he will make a profit. Forex futures trading is basically the same concept, but there are some notable differences. When you buy a currency pair, you get the currency right away, the trade is carried out instantly. Futures on the other hand are agreements to buy or sell a currency at some point in the future, hence the name. The buyer and seller makes a contract that has to be kept. You make money from futures if the price of the currency pairs is lower in the future than what you agreed to in the contract.

There’s not a huge market for forex futures trading and if you have traded commodity futures or oil futures, you may feel a little disappointed. This may encourage you to trade spot forex instead, which is trading currency pairs instantly on the market.

Spot forex trading has many advantages compared to forex futures. Futures, including forex futures, are regulated by the NFA (National Futures Association) and they charge fees on all futures trades. Spot forex are unregulated so you don’t have to pay any fees. Another advantage is that spot forex are traded 24 hours a day, where forex futures are only traded when the futures exchange is open. Forex spots are also much more liquid which means that you can fill your order right away and get the price that you want.

As a forex trader, you will be spoilt by choice of brokers, there are over hundred available, and most of them use the popular Meta Trader platform which has a wide userbase and many add ons.

The risk is also lower when you trade spot forex instead of futures, because you don’t commit in the same way. If you have bought a spot, you can always sell it again, unlike futures, where you are committed to buying or selling in the future.

Forex futures trading may not be the best choice for a beginner, but if you are a trader already and is looking for a new challenge then forex futures trading, may be just what you are looking for. Because of the things mentioned above, there are fewer traders who specialize in forex futures trading, so the competition is less fierce.

Forex Leverage

Fortunes are made and lost on the forex market every day, it’s the only place in the world where the action is so frenetic and the traded volume so large, that you can turn millionaire overnight, or in the case of George Soros and his attack on the pound, billionaire overnight. The forex market makes all other markets pale in comparison, it’s 50 times larger than the stock market and 15 times larger than the bond market. The number of forex traders keep growing too as brokers promote their services too an ever growing audience over the internet. Unlike stock and bonds which have plummeted in value over the recent years and wiped out savings, the forex market is a continuous source of profit and can never turn unprofitable because of it’s nature. The forex market offers the opportunity for profit in both good and bad times.

This article is about the unique aspect of forex leverage, which is the main reason why so many traders are looking to get into forex trading. Imagine if you talked to your bank about buying a few stocks or bonds and the bank offered you 100 times more stock at no additional cost. Unthinkable I know, but in forex trading, that’s actually reality. Leverage is trading with money that you borrow in the market. With leverage you can trade for hundreds of times more than what is actually in your account. The only thing you need is to meet margin payments on the total amount. Leverage lets you trade for $100,000, $200,000 or even more for just $1000 in your account. That’s a lot to throw around and that’s why forex trading is the only market where riches can be made so fast.

Leverage holds some risks though, it’s great to have leverage when you win your trades, but what happens when you lose? Since you gear your trades, you will receive profits hundreds of times larger than your deposit, but you will also risk losing hundreds times faster. The good thing is that you can never lose more than what you have in your account, so you don’t risk going into debt. The bad thing is, that your broker will cut off your account by demanding margin payments faster. If you don’t have this money, then they will simply close your account. Still it’s not the worst trade off in the world: You can make hundreds of times in profits, but you can never lose more than you deposited. That’s a good deal by all accounts.

Forex leverage levels shouldn’t be the only reason for getting into forex trading, though it’s easy to see how it can appeal to many people who are tired of being told to wait 10-20-30 years for a return on their investments. If you feel this way and is comfortable with risking your deposit, then leveraging your forex trades could be just the thing you want. Check out some brokers and see what levels they offer. Some only offer 100 times while others offer up to 400 times.

GDP List

2008 Country GDP List (in millions of USD)

Source: International Monetary Fund

— Flag of World World 60,689,812

— European Union 18,394,115

1 United States 14,264,600

2 Japan 4,923,761

3 China (PRC) 4,401,614h

4 Germany 3,667,513

5 France 2,865,737

6 United Kingdom 2,674,085

7 Italy 2,313,893

8 Russia 1,676,586

9 Spain 1,611,767

10 Brazil 1,572,839

11 Canada 1,510,957

12 India 1,209,686

13 Mexico 1,088,128

14 Australia 1,010,699

15 South Korea 947,010

16 Netherlands 868,940

17 Turkey 729,443

18 Poland 525,735

19 Indonesia 511,765

20 Belgium 506,392

21 Switzerland 492,595

22 Sweden 484,550

23 Saudi Arabia 481,631

24 Norway 456,226

25 Austria 415,321

26 Taiwan 392,552

27 Greece 357,549

28 Iran 344,820

29 Denmark 342,925

30 Argentina 326,474

31 Venezuela 319,443

32 South Africa 277,188

33 Finland 273,980

34 Ireland 273,328

35 Thailand 273,248

36 United Arab Emirates 260,141

37 Portugal 244,492

38 Colombia 240,654

39 Malaysia 222,219

40 Czech Republic 217,077

— Hong Kong 215,559

41 Nigeria 214,403

42 Israel 201,761

43 Romania 199,673

44 Singapore 181,939

45 Ukraine 179,725

46 Chile 169,573

47 Philippines 168,580

48 Pakistan 167,640

49 Egypt 162,164

50 Algeria 159,669

51 Kuwait 158,089

52 Hungary 156,284

53 Kazakhstan 132,229

54 New Zealand 128,492

55 Peru 127,598

56 Qatar 102,302

57 Libya 100,071

58 Slovakia 95,404

59 Iraq 90,907

60 Vietnam 89,829

61 Morocco 86,394

62 Angola 83,384

63 Bangladesh 81,938

64 Croatia 69,332

65 Belarus 60,288

66 Sudan 57,911

67 Luxembourg 54,973

68 Syria 54,803

69 Slovenia 54,639

70 Oman 52,584

71 Ecuador 52,572

72 Bulgaria 51,989

73 Serbia 50,061

74 Lithuania 47,304

75 Azerbaijan 46,378

76 Dominican Republic 45,597

77 Tunisia 40,348

78 Sri Lanka 39,604

79 Guatemala 38,956

80 Latvia 34,054

81 Uruguay 32,262

82 Kenya 30,236

83 Costa Rica 29,828

84 Lebanon 28,939

85 Uzbekistan 27,918

86 Myanmar 27,182

87 Yemen 27,151

88 Ethiopia 25,658

89 Cyprus 24,943

90 Trinidad and Tobago 24,806

91 Cameroon 23,243

92 Cote d’Ivoire 23,508

93 Estonia 23,232

94 Panama 23,088

95 El Salvador 22,115

96 Bahrain 21,236

97 Tanzania 20,721

98 Jordan 20,030

99 Bosnia and Herzegovina 18,469

100 Equatorial Guinea 18,525

101 Iceland 17,549

102 Bolivia 17,413

103 Ghana 16,124

104 Paraguay 16,006

105 Brunei 14,553

106 Uganda 14,529

107 Gabon 14,519

108 Jamaica 14,397

109 Senegal 13,350

110 Zambia 14,323

111 Honduras 14,126

112 Botswana 13,461

113 Albania 12,964

114 Georgia 12,870

115 Nepal 12,698

116 Afghanistan 12,061

117 Armenia 11,928

118 Democratic Republic of the Congo 11,589

119 Cambodia 11,182

120 Republic of the Congo 10,774

121 Mozambique 9,654

122 Madagascar 9,254

123 Republic of Macedonia 9,569

124 Mali 8,783

125 Mauritius 8,738

126 Namibia 8,456

127 Chad 8,390

128 Malta 8,338

129 Burkina Faso 8,103

130 Papua New Guinea 8,092

131 The Bahamas 7,463

132 Haiti 6,952

133 Benin 6,940

134 Nicaragua 6,350

135 Moldova 6,124

136 Niger 5,379

137 Laos 5,260

138 Mongolia 5,258

139 Tajikistan 5,135

140 Kyrgyzstan 5,049

141 Montenegro 4,822

142 Guinea 4,542

143 Rwanda 4,459

144 Malawi 4,268

145 Barbados 3,682

146 Fiji 3,590

147 Mauritania 3,161

148 Togo 2,890

149 Swaziland 2,843

150 Suriname 2,415

151 Central African Republic 1,997

152 Sierra Leone 1,955

153 Cape Verde 1,723

154 Lesotho 1,620

155 Eritrea 1,476

156 Belize 1,381

157 Bhutan 1,368

158 Maldives 1,259

159 Antigua and Barbuda 1,256

160 Guyana 1,130

161 Burundi 1,097

162 Saint Lucia 1,025

163 Djibouti 982

164 Liberia 836

165 Seychelles 834

166 The Gambia 808

167 Grenada 639

168 Saint Vincent and the Grenadines 601

169 Saint Kitts and Nevis 555

170 Vanuatu 573

171 Samoa 537

172 Comoros 532

173 East Timor 499

174 Solomon Islands 473

175 Guinea-Bissau 461

176 Dominica 364

177 Tonga 258

178 Sao Tome and Principe 176

179 Kiribati 137

Finexo – Fx Trading Broker Review

Finexo is an independent quality broker that has operated since 2003. While it may still be a young broker, they are definitely one of the most prolific brokers out there in the retail market. Let me give you some info on why you may want to trade with Finexo. First of all, Finexo is a white label of the market leader Saxo Bank and has been since 2004. Now, what does this mean for you? A white label is a company or broker that uses the same platform and operations as the ‘parent’ broker, which in this case is Saxo Bank. Saxo Bank is considered the market leader with their platform ‘SaxoTrader’. Finexo uses this technology, but where Saxo Bank is aimed at high end investors with high deposit minimums, Finexo is aimed at smaller investors as well. This is actually one of the goals of Finexo as you can read on their website. They aim to make forex trading as easy as possible.

Finexo does keep that promise, as it is indeed very easy to sign up for an account with them. I could literally start fx trading within no more than a few minutes after opening an account. Finexo follows the popular trends and allows you to depsoit and withdraw with many different options such as Paypal, Money Bookers, Neteller and more. That is a nice and convenient feature.

Finexo’s own platform is called ForexTrader and is a Saxo Bank derivative. That by itself is a guarantee for quality. SaxoTrader and ForexTrader is the best trading platform out there in my opinion. It is fast and reliable and has all the features you could ever want as a professional trader or as a beginner. They offer one click trading and tons of options to optimize your trading platform.

You also get the very convenient and functional mobile trading possibilities. You can trade from your cell phone or any computer that has a link up, you don’t need to download any software as they run a web application as well, that works surprisingly good. All of it is free of charge.

Finexo has perhaps the most available currency pairs available for trade, an impressive 50 currency pairs, including some exotic ones that you won’t see many other places. I like this added flexibility for traders. A big thumbs up for that.

Finexo has a low minimum deposit of only 25$. Of course you would probably want to deposit significantly more than that, but it is still a nice touch and allows beginners to test the waters before jumping in with the sharks.

The mini accounts have 200:1 leverage levels and spreads of 5 pip, while the classic account has 200:1 leverage and 3 pips spread. There is also the option of going for a VIP account with only 2 pip spreads.

Whats the conclusion then? Finexo is an established and respected broker that I can recommend with good conscience. I rank them at the very top of retail brokers.

Forex For Dummies

So you have decided to learn how to trade Forex? Or maybe you are just curious about how you can make money from trading Forex? Let me just say: Good for you and welcome to the exiting world of  fx trading where millions are made and lost every minute. The only financial market where the ‘little man’ has a chance to play ball with the big players. Why is this? First of all, the forex market is by far the largest financial market in the world. It’s actually bigger than all other markets combined. Take the stock market and the bonds market and pool them together and you are still far from reaching the daily numbers that you get on the forex market.

So what exactly is traded on the forex market and how is it possible to make many there? Forex is an abbreviation of Forex Exchange, basically it means foreign currencies. Foreign currency is so important because it is used on an everyday basis by people in all situations. Just like when we go for a vacation and change money into the local currency, corporations must also do so when they buy and sell abroad. Add to that, that there are many players in the game only to speculate and you have a market that is very big and very volatile.

There is no centralized market for forex such as a stock exchange or commodities exchange and there are no fixed prices. Forex is traded on the interbank market that only banks and brokers have access too. That means there can be significant differences in prices of currency from region to region and time to time as the market adjusts. This process of earning on price difference is called arbitrage but is usually not an option for the smaller investor.

Forex is traded in currency pairs, these are denoted by the abbreviated base currency first and then the secondary currency last. An example is USD/EUR.
You make money by either selling or buying a currency with a different currency. Lets say you buy Euro with your USD. Now if the relative price of the Euro goes up then you have made money as you can exchange those Euro’s into more USD than you originally paid for.

While the actual process of earning from Forex is easy, it is far more difficult to actually predict movements of currencies because there is so many factors influencing the price. You have economic, financial and political factors to take into account as well as the psychology of the market.

This is why traders develop forex trading systems. These can be based on either technical or fundamental analysis.

Technical analysis aims to predict the future movement of a forex pair by analyzing the trend graph of a pair looking for patterns that are likely to repeat themselves.
Fundamental analysis aims to predict prices by taking into account the underlying economic, financial and political movements of a currencies base country.
Both require skill and dedication to master and both are very profitable methods of making money in the forex market.

Richest Man in the World

As you can see from the list below, Warren Buffet is currently the richest man in the world. Warren buffet has obtained his wealth through many successful investments over a period of more than 40 years. Slim Helu is second, he obtained his fortune partly through inheritence and partly through telecoms business. Number 3 is Bill Gates, founder of the Microsoft Corporation. I think we all know who microsoft are 🙂

Warren Buffett $62 billion
Slim Helú $60 billion
Bill Gates $58 billion
Lakshmi Mittal $45 billion
Mukesh Ambani $43 billion
Anil Ambani $42 billion
Kamprad, Ingvar $31 billion
Kushal Pal Singh $30 billion
Oleg Deripaska $28 billion
Karl Albrecht $27 billion

When it comes to Forex trading, it shows that eevn relatively conservative returns can earn big in the long term. Warren Buffet has averaged around 24% per year over more than 40 years and he is the richest man in the world. 24% per year is certainly achievable for many experienced forex traders.