Forex FAQ

How can I start trading Forex?
You'll need to register a trading account with a Forex broker, such as Then you can begin using their Forex client program to buy and sell currencies. This will take less than 5 minutes of your time!

Who owns Forex and where is it located?
It's not owned by anyone in particular. Forex is an Interbank market, meaning that it's transactions are conducted only between two participants - seller and the buyer. So as long as existing banking system will exist, Forex will be here. It's not connected to any specific country or government organization.

What the working hours of Forex market?
Forex market is open from 22:00 GMT Sunday (opening of Australia trading session) till 22:00 GMT Friday (closing of USA trading session).

What is margin?
Margin is money you need to have in your broker account to secure your open position. Different brokers require different amount of margin money to keep your positions open.

What are the "long" and "short" positions?
Long position is a "buy" position, meaning that this position will be in profit if price goes up.
Short position is a "sell" position, meaning that this position will be in profit if price goes down.

What is the best Forex trading strategy?
There is none. You should constantly develop your own strategies for every possible market situation, if you want to be in profit. Specific strategies can only be good for a certain period of time and for certain currency pairs.

How much money I need to start trading Forex?
With you can start trading Forex with as little as $1. Usually, the minimum amount varies from $100 to $10,000 ($100,000 and more for Interbank trading).

Forex Glossary

Forex Glossary

Ask (Offer) — price of the offer, the price you buy for.

Aussie — a Forex slang name for the Australian dollar.

Bank Rate — the percentage rate at which central bank of a country lends money to the country's commercial banks.

Bid — price of the demand, the price you sell for.

Broker — the market participating body which serves as the middleman between retail traders and larger commercial institutions.

Cable — a Forex traders slang word GBP/USD currency pair.

Carry Trade — in Forex, holding a position with a positive overnight interest return in hope of gaining profits, without closing the position, just for the central banks interest rates difference.

CFD — a Contract for Difference — special trading instrument that allows financial speculation on stocks, commodities and other instruments without actually buying.

Commission — broker commissions for operation handling.

CPI — consumer price index the statistical measure of inflation based upon changes of prices of a specified set of goods.

EA (Expert Advisor) — an automated script which is used by the trading platform software to manage positions and orders automatically without (or with little) manual control.

ECN Broker — a type of Forex brokerage firm that provide its clients direct access to other Forex market participants. ECN brokers don't discourage scalping, don't trade against the client, don't charge spread (low spread is defined by current market prices) but charge commissions for every order.

ECB (European Central Bank) — the main regulatory body of the European Union financial system.

Fed (Federal Reserve) — the main regulatory body of the United States of America financial system, which division — FOMC (Federal Open Market Committee) — regulates, among other things, federal interest rates.

Fibonacci Retracements — the levels with a high probability of trend break or bounce, calculated as the 23.6%, 32.8%, 50% and 61.8% of the trend range.

Flat (Square) — neutral state when all your positions are closed.

Fundamental Analysis — the analysis based only on news, economic indicators and global events.

GDP (Gross Domestic Product) — is a measure of the national income and output for the country's economy; it's one of the most important Forex indicators.

GTC (Good Till Cancelled) — order to buy or sell of a currency with a fixed price or worse. The order is alive (good) until execution or cancellation.

Hedging — maintaining a market position which secures the existing open positions in the opposite direction.

Jobber — a slang word for a trader which is aimed toward fast but small and short-term profit from an intra-day trading. Jobber rarely leaves open positions overnight.

Kiwi — a Forex slang name for the New Zealand currency — New Zealand dollar.

Leading Indicators — a composite index (year 1992 = 100%) of ten most important macroeconomic indicators that predicts future (6-9 months) economic activity.

Limit Order — order for a broker to buy the lot for fixed or lesser price or sell the lot for fixed or better price. Such price is called limit price.

Liquidity — the measure of markets which describes relationship between the trading volume and the price change.

Long — the position which is in a Buy direction. In Forex, the primary currency when bought is long and another is short.

Loss — the loss from closing long position at lower rate than opening or short position with higher rate than opening, or if the profit from a position closing was lower than broker commission on it.

Lot — definite amount of units or amount of money accepted for operations handling (usually it is a multiple of 100).

Margin — money, the investor needs to keep at broker account to execute trades. It supplies the possible losses which may occur in margin trading.

Margin Account — account which is used to hold investor's deposited money for FOREX trading.

Margin Call — demand of a broker to deposit more margin money to the margin account when the amount in it falls below certain minimum.

Market Order — order to buy or sell a lot for a current market price.

Market Price — the current price for which the currency is traded for on the market.

Momentum — the measure of the currency's ability to move in the given direction.

Moving Average (MA) — one of the most basic technical indicators. It shows the average rate calculated over a series of time periods. Exponential Moving Average (EMA), Weighted Moving Average (WMA) etc. are just the ways of weighing the rates and the periods.

Offer (Ask) — price of the offer, the price you buy for.

Open Position (Trade) — position on buying (long) or selling (short) for a currency pair.

Order — order for a broker to buy or sell the currency with a certain rate.

Pivot Point — the primary support/resistance point calculated basing on the previous trend's High, Low and Close prices.

Pip (Point) — the last digit in the rate (e.g. for EUR/USD 1 point = 0.0001).

Profit (Gain) — positive amount of money gained for closing the position.

Principal Value — the initial amount of money of the invested.

Realized Profit/Loss — gain/loss for already closed positions.

Resistance — price level for which the intensive selling can lead to price increasing (up-trend).

Scalping — a style of trading notable by many positions that are opened for extremely small and short-term profits.

Settled (Closed) Position — closed positions for which all needed transactions has been made.

Slippage — execution of order for a price different than expected (ordered), main reasons for slippage are — "fast" market, low liquidity and low broker's ability to execute orders.

Spread — difference between ask and bid prices for a currency pair.

Standard Lot — 100,000 units of the base currency of the currency pair, which you are buying or selling.

Stop-Limit Order — order to sell or buy a lot for a certain price or worse.

Stop-Loss Order — order to sell or buy a lot when the market reaches certain price. It is used to avoid extra losses when market moves in the opposite direction. Usually is a combination of stop-order and limit-order.

Support — price level for which intensive buying can lead to the price decreasing (down-trend).

Swap — overnight payment for holding your position. Since you are not physically receiving the currency you buy, your broker should pay you the interest rate difference between the two currencies of the pair. It can be negative or positive.

Technical Analysis — the analysis based only on the technical market data (quotes) with the help of various technical indicators.

Trend — direction of market which has been established with influence of different factors.

Unrealized (Floating) Profit/Loss — a profit/loss for your non-closed positions.

Useable Margin — amount of money in the account that can be used for trading.

Used Margin — amount of money in the account already used to hold open positions open.

Volatility — a statistical measure of the number of price changes for a given currency pair in a given period of time.

VPS (Virtual Private Server) — virtual environment hosted on the dedicated server, which can be used to run the programs independent on the user's PC. Forex traders use VPS to host trading platforms and run expert advisors without unexpected interruptions.

Pivot points

BENEFITS OF FOREX

BENEFITS OF FOREX

Below are the benefits of trading the Forex markets:

Minimum Brokerage Commissions
Transacting in the FOREX market does not require much brokerage commission expense. As any experienced trader knows, equity transactions and futures transactions both require brokerage commission that, in some cases, constitute a significant expense. Minimum brokerage commission is an immediate cost saving to the FOREX trader.

Minimum Starting Balances
The minimum starting balance for accounts is $300 thus placing FOREX trading within reach of those individuals who have only a modest amount of risk capital. Furthermore, an operational FOREX policy automatically closes all open positions the moment margin in an account drops below the required level. This helps to ensure that the trader never loses more money than that originally deposited.

Streaming Real-Time Quotes
In the FOREX market, traders execute directly off streaming real-time bid and offer quotes. The bid or ask on sees quoted is typically the price at which one is able to deal. Whilst there may arise discrepancies between the two, it should be noted that in most markets, a trader may face uncertainty with regard to price fills for an order, especially when transactions are executed on an exchange floor to which the trader does not have direct access to.

Open 24 hours a Day
The FOREX market operates continuously from its open at 2pm Sunday afternoon New York time with the Sydney-Auckland market until its close at 5pm Friday in New York. FOREX trading follows the day around the world: from Sydney to Tokyo to London to New York. The seamless 24-hour nature of the FOREX market enables the trader to react to news as it occurs - regardless of the time. It gives the trader the flexibility to set their own hours of the trading day.

Real Time Reporting
In the Forex market, traders can see the value of their positions and account equity move up and down with the market in real time. This key information for every account is re-calculated and updated every time the exchange rates change. Traders have immediate access to detailed information regarding every open position, open order, and the generated profit/loss per trade.

High Leverage
Margin nodoubt, is required to trade FOREX but margin is not a down payment on purchase of equity, as in the stock market, but rather it serves as a performance bond or good faith deposit, as in the futures market. Margin is required to ensure ones ability to handle the financial risk of the trade. With FOREX, the required margin is only a very small percentage of the market value of the position being traded. For example, margin of the mini contracts typically is under $200. (Margins vary.) This is referred to as leverage. In other words, by using leverage, a trader can hold a position much larger than the account value. High leverage means that a change in FOREX prices will have a much larger impact on the dollar value of the account and this can work both in favor of the trader and against the trader.

Real-Time Charts and News
The availability of real-time charts and news - along with streaming real-time quotes - enables the FOREX trader to react immediately to developments as they unfold. There is no need to wait until the market opens before taking appropriate action.

Flexible Contract Sizes
FOREX traders can choose among two types of accounts:
Standard
In this account, the size of a trade can be 100,000 units of foreign currency. The latter is referred to as a "standard" contract and is similar in size to a typical futures contact.
Mini
In this account, the size of a trade is 1/10 the standard contract, or 10,000 units of foreign currency. This is referred to as a "mini" contract. Profit and loss is one-tenth the amount of the corresponding standard contract.

There is no difference in price or liquidity between the different unit sizes. The only difference is that the smaller unit sizes have smaller risk and therefore, smaller margin requirements. The trader has the flexibility in selecting a contract size that is appropriate to their amount of trading capital and tolerance for risk.

Automatic Closure
An important element of risk management when FOREX trading is the automatic closure of all customer positions in the event that funds in the account fall below margin requirements. This prevents a trader's account from falling into a negative balance.

FOREX VS OTHER MARKETS

FOREX VS OTHER MARKETS

Forex vs. Equities and Futures
The trading of foreign exchange provides significant advantages over equities trading and futures trading. In addition to these advantages, the seamless 24 hour nature of the Forex market gives the trader a unique advantages of reacting to news and worldwide developments instantaneously, participating in real-time, in the largest trading market in the world.

	Forex Trading	Equities Trading	Futures Trading
Leverage	Upto 400:1	2:1	15:1
Liquidity	Volume: $1.5 Trillion Aprox.	Limited Liquidity	Limited Liquidity
Commissions	Lowest Commissions	Commissions and Exchange Fees	Commissions and Exchange Fees
Trading Hours	24 Hour Market	7 Hours with Limited After Hours	7 Hours with Limited After Hours

Ability to Benefit in Rising or Declining Markets
Unlike equity and fixed income managers, a Forex trader is able to benefit under any market conditions by either buying or selling a particular currency in relationship to another. In the Forex market there will always be one currency strengthening against another, unlike stock shares that move only up or down.

Global Diversification
The performance of equity and fixed income investments in one country is quite often, highly correlated with the performance of equity and fixed income investments in other countries. Global portfolios composed solely of equity and fixed income investments lack full diversification, even if they are geographically dispersed. Investing in currencies gives investors access to markets beyond equity and fixed income investments, providing more complete diversification and a reduction in portfolio risk

VISION & MISSION

VISION
To be a globally competitive service provider catering to the financial needs of individuals.

MISSION
Our philosophy is “to give more than to receive”. We believe that with this philosophy as well as attention to prudent risk management techniques will ensure growth and profitability.

We have a global way of thinking and continually strive to seek new and better products, including technological, human and financial resources.

We value our customers and employees as partners by providing mutually beneficial services through international financial markets.

We are dedicated to strengthening our organization by creating a competitive environment, building sustained long-term relationships and conducting business with honesty, fairness and integrity to achieve our vision.

To be a globally competitive service provider catering to the financial needs of individuals.

MISSION
Our philosophy is “to give more than to receive”. We believe that with this philosophy as well as attention to prudent risk management techniques will ensure growth and profitability.

We have a global way of thinking and continually strive to seek new and better products, including technological, human and financial resources.

We value our customers and employees as partners by providing mutually beneficial services through international financial markets.

We are dedicated to strengthening our organization by creating a competitive environment, building sustained long-term relationships and conducting business with honesty, fairness and integrity to achieve our vision.

10 reasons to trade with FOREX

Trade on spreads as low as 1-2 pips, commission-free

Trade currencies and spot gold at FOREX.com. Dealing spreads are as low as 1-2 pips on the most widely traded currency pairs. As always, you pay no commissions at FOREX.com, only the bid/offer spread. And with our fractional pips, you gain an extra digit of precision so that you can take advantage of smaller price movements.

Plus, you can enter orders at any price - even inside the spread - and trade around news events, major economic announcements and other times of high market volatility.


Fully automated click & deal trading, with instantaneous fills

At FOREX.com, we've always automated processing for all click & deal forex trades. When you click BUY or SELL, our systems perform a real time margin check and, if accepted, immediately respond with a trade confirmation.

Why is this important to you? First, you benefit from an unbiased trading environment that is not subject to human intervention. Second, automated trade processing improves our efficiency, which lowers our overhead and allows us to pass along the saving to you in the form of tighter spreads.

Flexible account types and leverage

» Standard accounts, with a default lot size of 100K and leverage⁺ of 100:1 (1%), are well suited for active forex traders.

» Mini accounts feature smaller, 10k contract sizes and leverage⁺ of up to 200:1. For traders new to the forex market, a mini account is a great way to get started trading in a live environment.

Get Started Now. Open a FOREX.com trading account.

Award-winning forex trading platform

We pioneered our signature "one-click" dealing in 2000 and have been nominated as Best Forex Brokerage by the readers of Technical Analysis of Stocks and Commodities for the past two years.

Our proprietary trading platform, FOREXTrader, successfully combines ease-of-use with remarkable flexibility. FOREXTrader offers a highly intuitive user interface, advanced customization features, and a full suite of professional charting and order management tools


Advanced tools & research

As a FOREX.com client, you'll have access to a variety of resources and unique trading tools that can help you make more informed trading decisions.

•	Full suite of daily and weekly forex research. Whether you're interested in fundamental analysis or technical trading methods, you'll have access to a wide variety of institutional-grade Forex market analysis as a FOREX.com client. And, tune in to our Weekly Market Call for timely trading ideas and analysis from Brian Dolan, our Chief Currency Strategist.
•	ForexInsider streaming market commentary: Our exclusive FOREXInsider delivers actionable analysis of news, events and technical levels that impact currency prices, in real-time, to your trading platform. Updates are published as often as 20 times an hour, so that you can act instantly on new market intelligence.
•	FOREXCharts by eSignal: Access eSignal's professional level charting package with over 30 analytical tools and indicators, a complete selection of drawing tools, and choice of real-time data feed. Preview FOREXCharts by eSignal

Guaranteed fills on stop loss and limit orders

During FOREX.com's trading hours, all stop and limit orders up to $2 million are guaranteed to be filled at your price.

We understand that stop loss and limit orders are an important part of every trader's risk management strategy, and so we take this policy very seriously. This policy does not apply during major fundamental announcements, or outside FOREX.com's normal trading hours.

Negative account balance protection

At FOREX.com, your risk is only limited to funds on deposit.

Our margin policy eliminates concerns about debit balances by guaranteeing that you will never owe more than you have in your account.


Support for automated (API) trade executions

For clients utilizing an algorithmic trading system or their own black box strategy, FOREXTrader supports fully automated trade execution via a standard FIX protocol or web-services API.

The API provides users with the ability to receive a real-time rate feed, submit trade requests, set and modify stop-loss and take-profit orders, and receive automated confirmations of trade activity. Developers can request access to a testing environment in order to test their systems in real time before using the API in a production environment.


Trader education, mentoring services, and more

FOREX.com delivers hands-on forex training through a variety of educational programs and events. For traders just getting started in the Forex market, we offer one-on-one platform walkthroughs, online training courses, as well as live, introductory web-based seminars ("webinars").

Exclusive client-only events cover more in-depth trading techniques and strategies and include an interactive Q&A with our senior analysts and currency strategists.

As a FOREX.com client, you can also take advantage of our professional mentoring services. During your one-on-one consultations with a senior forex specialist, you can discuss the latest market research report, ask for a second opinion about your trading plan, or just bounce ideas around.

Contact us to learn more about our mentoring service


Wireless trading and account access

As a FOREX.com client or registered practice account user, you can access the currency markets via virtually any Internet-enabled wireless device. Keep on top of the market from anywhere – you can view real-time forex quotes, news and commentary, and charts and set rate alerts. You can also monitor your open positions, leave orders, even buy and sell at the market.

There are no extra fees, and no special sign up. All you need is an Internet-enabled wireless device.

Learn more about FOREXTrader.wireless

LEARN

New to the Forex market? Discover the full breadth of our offering We've worked hard to distill our collective trading experience into an approach suitable for all skill levels. Step 1: Understand the FOREX market. Dive into Forex 101 for a compact overview of the basics or sit back and join us at one of our live interactive webinars. Step 2: Prepare to trade in a live environment. Register for one of our training courses and study at your own pace or join us at a local workshop, where our experienced instructors can teach you in a dynamic classroom setting. Step 3: Test your skills risk free. Sharpen your technical analysis techniques with a free 30 day practice account. Forex 101 Read free online material. Review the basics of the Forex market, its key concepts and common trading drivers. Webinars Join us for free interactive webinar. Our webinar series provide instruction, demonstration and discussion. Workshops Come meet us at a workshop. Attend a local workshop designed for new and active traders alike. Training courses Learn at your own pace. Sign up for one of our comprehensive online training courses. Consultations Trade with a plan. Speak with one of our experienced Market Strategists to help you develop a strategy to meet your goals.

How to Trade Forex

Trading foreign exchange is exciting and potentially very profitable, but there are also significant risk factors. It is crucially important that you fully understand the implications of margin trading and the particular pitfalls and opportunities that foreign exchange trading offers. On these pages, we offer you a brief introduction to the Forex markets as well as their participants and some strategies that you can apply. However, if you are ever in doubt about any aspect of a trade, you can always discuss the matter in-depth with one of our dealers. They are available 24 hours a day on the Saxo Bank online trading system, SaxoTrader.

The benchmark of its service is efficient execution, concise analysis and expertise – all achieved whilst maintaining an attractive and competitive cost structure. Today, Saxo Bank offers one of Europe's premier all-round services for trading in derivative products and foreign exchange. We count amongst our employees numerous dealers and analysts, each of whom has many years experience and a wide and varied knowledge of the markets – gained both in our home countries and in international financial centres. When trading foreign exchange, futures and other derivative products, we offer 24-hour service, extensive daily analysis, individual access to our Research & Analysis department for specific queries, and immediate execution of trades through our international network of banks and brokers. All at a price considerably lower than that which most companies and private investors normally have access to.

The combination of our strong emphasis on customer service, our strategy and trading recommendations, our strategic and individual hedging programmes, along with the availability to our clients of the latest news and information builds a strong case for trading an individual account through Saxo Bank.

Terms of trading are agreed individually depending on the volume of your transactions, but are generally much lower in cost when compared to banks and brokers. Your margin deposit can be cash or government securities, bank guarantees etc. Large corporate or institutional clients may be offered trading facilities on the strength of their balance sheet. The minimum deposit accepted for an individual trading account depends on the account type. Trade confirmations and real-time account overview are built into SaxoTrader, while further account information can be produced in accordance with your specific requirements.

forex trading example

Forex trading examples

Example 1

An investor has a margin deposit with Saxo Bank of USD 100,000.

The investor expects the US dollar to rise against the Swiss franc and therefore decides to buy USD 2,000,000 - 2% of his maximum possible exposure at a 1% margin Forex gearing.

The Saxo Bank dealer quotes him 1.5515-20. The investor buys USD at 1.5520.

Day 1: Buy USD 2,000,000 vs. CHF 1.5520 = Sell CHF 3,104,000.

Four days later, the dollar has actually risen to CHF 1.5745 and the investor decides to take his profit.

Upon his request, the Saxo Bank dealer quotes him 1.5745-50. The investor sells at 1.5745.

Day 5: Sell USD 2,000,000 vs. CHF 1.5745 = Buy CHF 3,149,000.

As the dollar side of the transaction involves a credit and a debit of USD 2,000,000, the investor's USD account will show no change. The CHF account will show a debit of CHF 3,104,000 and a credit of CHF 3,149,000. Due to the simplicity of the example and the short time horizon of the trade, we have disregarded the interest rate swap that would marginally alter the profit calculation.

This results in a profit of CHF 45,000 = approx. USD 28,600 = 28.6% profit on the deposit of USD 100,000.

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Example 2:

The investor follows the cross rate between the EUR and the Japanese yen. He believes that this market is headed for a fall. As he is not quite confident of this trade, he uses less of the leverage available on his deposit. He chooses to ask the dealer for a quote in EUR 1,000,000. This requires a margin of EUR 1,000,000 x 5% = EUR 10,000 = approx. USD 52,500 (EUR /USD 1.05).

The dealer quotes 112.05-10. The investor sells EUR at 112.05.

Day 1: Sell EUR 1,000,000 vs. JPY 112.05 = Buy JPY 112,050,000.

He protects his position with a stop-loss order to buy back the EUR at 112.60. Two days later, this stop is triggered as the EUR o strengthens short term in spite of the investor's expectations.

Day 3: Buy EUR 1,000,000 vs. JPY 112.60 = Sell JPY 112,600,000.

The EUR side involves a credit and a debit of EUR 1,000,000. Therefore, the EUR account shows no change. The JPY account is credited JPY 112.05m and debited JPY 112.6m for a loss of JPY 0.55m. Due to the simplicity of the example and the short time horizon of the trade, we have disregarded the interest rate swap that would marginally alter the loss calculation.

This results in a loss of JPY 0.55m = approx. USD 5,300 (USD/JPY 105) = 5.3% loss on the original deposit of USD 100,000.

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Example 3

The investor believes the Canadian dollar will strengthen against the US dollar. It is a long term view, so he takes a small position to allow for wider swings in the rate:

He asks Saxo Bank for a quote in USD 1,000,000 against the Canadian dollar. The dealer quotes 1.5390-95 and the investor sells USD at 1.5390. Selling USD is the equivalent of buying the Canadian dollar.

Day 1: Sell USD 1,000,000 vs. CAD 1.5390. He swaps the position out for two months receiving a forward rate of CAD 1.5357 = Buy CAD 1,535,700 for Day 61 due to the interest rate differential.

After a month, the desired move has occurred. The investor buys back the US dollars at 1.4880. He has to swap the position forward for a month to match the original sale. The forward rate is agreed at 1.4865.

Day 31: Buy USD 1,000,000 vs. CAD 1.4865 = Sell CAD 1,486,500 for Day 61.

Day 61: The two trades are settled and the trades go off the books. The profit secured on Day 31 can be used for margin purposes before Day 61.

The USD account receives a credit and debit of USD 1,000,000 and shows no change on the account. The CAD account is credited CAD 1,535,700 and debited CAD 1,486,500 for a profit of CAD 49,200 = approx. USD 33,100 = profit of 33.1% on the original deposit of USD 100,000.

Learn Forex Trading

Gone are the days, when people with small bundles of notes surely would draw your attention at the airports/ international bus terminus/ important office areas, who are ready to exchange your currency to your desired foreign exchange at a commission. The literacy, the spread, the entrants of various professionals, automated software, revolutionary online forex trading companies have been able to put a control over the entire unorganized sector to pave the way for complete professionalism and to offer a much more convenient and systematic way of Forex trading.

At the inception phase, people, mainly the large corporations used to perform their Forex trading through various banks or major financial institutes, who used to operate at the international level. The overwhelming popularity of Forex of today's modern world due to the liberalization and global economic polices is empowered by the telecom boom, the immense reach of Internet and the unimaginable advantage of advanced technology. The instantaneous effect and up-to-date news provided by the Online Forex Software exchange trading platform in the regime of online Forex, have given you the classical opportunity of taking decisions and immediate implementation. Online Forex trading has been standardized over the years after the initial teething problems, and today's Forex participants get an almost secured access through various online Forex trading companies, which is free from all encumbrances. The technology, its application in case of online Forex has been drastically improved with the increasing awareness of people at large. The success lies in bringing a wider gamut of people into Forex trading platform and in turn the entire Forex Software exchange trading platform has become commercially viable.

If we want to look into the current Foreign Exchange market, we can find a reasonable number of stakeholders beyond the predominated traditional Multi National Companies or MNCs, banks, brokers and the final impetus has given by the wide acceptance of a large number of commoners, who get engaged in Forex trading due to various reasons including even as a mere hobby. The latest encryption methodologies and plenty of guide and trend analysis will make you secured and comfortable even if you are a first timer dabbling into online Forex trading.

The concept of margin trading, implying the traded on margin, saves you for a huge amount of deposit in the Forex. The margin deposit varies between banks and it is always in percentile terms of the original amount, which the bank allows you to play. A simple example will show you the actual potential. Suppose a bank has kept the margin deposit as 2%, which implies that you need to deposit only $20000 USD to trade two million dollars and also you may gear up your profit by 200%. As the coin has got two sides, the 2% margin deposit in Forex may also take you to the road of losses by 200%. The rule remains same, when the offline forex trading changes it face to online forex trading.

As every investment carries the potential risk of both profit and loss, the luck of an aggressive online Forex trader may sway anywhere between 2 to 25% on a daily basis on an average. Just for the knowledge base, the beginner in Forex trading must be aware of that the interest rates on your deposit varies greatly depending upon the currencies and the prevailing practice is to play in multiple currencies, popularly known as Base currency and variable currency in the world of Forex both in traditional platform and in online Forex platform. Your awareness level, your analytic power, your intuition are the key driven forces to transform you to an informed Forex trader and to optimize your Return on Investment (ROI) in the most prospective financial market of today's economic world.

Forex History

The historical ways of evaluating the currency value of a country by worth of Gold, finally came to an end much later after the Second World War. Even during the first World War, the value of Gold has been used to determine the value of foreign currency of a country. However, US dominated financial world had introduced Bretton Woods Agreement in 1944, where the Forex trading used to consider the dollar value of the currency of the concerned country as the key parameter. The objective had been to fix the dollar value based on the rate of gold of the concerned country. The aim of establishing a stable market to get rid of any global financial crisis by prohibiting countries to devaluate their currencies, had been hindered by the phenomenal growth of Forex trading, which demands freedom from such control to take the ultimate advantage of the continuous influx from the foreign market. In fact the reign of gold could hardly face the challenges of modern economic boom all over the world. However the story of Frankenstein came into being, the US dollar itself got devaluated and that hit the final nail in the coffin to end the Bretton Woods Agreement era in 1971, allowing the new dawn of free floating real Foreign Exchange Market of today's world.

Nevertheless US dollars have always been playing a major role in Forex and reserves of US dollar serves as the prime factor in determining the country's wealth even today. The concept of globalization and the open market of outsourcing because of its proven advantages have made the core concept of foreign exchange more pertinent, where the foreign trade is hardly limited to big merchants only, rather it has now entered into the desktop computers of the professionals in their bedroom, where the concept of work from home has got its overwhelming popularity as a mode of extra income.Outsourcing jobs from US & UK to the third world countries like India, China, Malayasia have ultimately helped to increase the foreign exchange worth of the country. Besides the core market of Forex trading, a huge amount of exchanges in currency has been going on every day. Though Forex is a free market for all, but it has been tested to be season proof, in spite of market deregulation or share market fluctuations or even political instability of any country in particular. Currencies move freely across the geographical boundaries and in spite of such a free floating, none of the major industrialized countries has faced any blow during the last three decades.

The Internet realm has given us the unique opportunity of online foreign currency trading, which uses mainly forex exchange software. As the very preliminary rule of foreign exchange never generates any scope for a physical bank or exchange, central in nature unlike the share market, various companies have emerged in the recent past to build up a virtual trading platform, where a lot of people can participate even without much knowledge of the subject. If beginner becomes the prime reason of worry, then anybody can take help of various forex news, which are available all over the Internet. The pictorial representation of hike and downfall of foreign currencies will always give you the comfort and smoothen your decision making process.

Refer : etoronews.com

A blazing start in online forex trading often leads to over trading even without the knowledge of the online Forex trader. An early profit prompts the online Forex trader to invest even more funds for higher profit. He often decides to invest all his profits immediately and the apparently secured Forex platform becomes his default choice because of his plethora of success in earlier trading assignments.

Once trading comes up with an unfavorable outfit then it increases online Forex trader’s cup of woes. The struggle for existence forces him to look back at reality forgetting the rosy picture of his misleading mind. An online Forex trader should never be carried away with the spectacular results; rather he should focus on building a solid foundation for long-term benefits.
The primary concern is that a strategic plan should be broken down into weekly plans.

Whenever you plan scientifically and set your priorities on long term goals, the hopping tendency for attempting every trade will automatically come down. If the online Forex trader sets his weekly goal to 75 points, he is forced to restrain himself within 15 points on an average per day. The chance of over trading becomes minimal irrespective of ups and downs of the trading market. The first job in any online Forex trading platform is to reduce the number of trades per day. One has to consider the charts, resistance levels and MACD indicators before online Forex trading. When the investment amount becomes higher, the psychological factor forces him to consider all such factors before clicking the Go button. The lesser the number of trades, the lesser number one has to exert for the rigmarole of such vast calculations.

It is often found that an online Forex trader fails to show his resilience against the lucrative figure of a particular trade. Never forget that the online Forex trading platform is the battlefield where you need to fight mostly with yourself. Perhaps the self-evaluating question to be raised is whether that trade is required or not. A proper strategic planning can lead to a more accurate answer, whereby he might take a decision to wait further. It’s never advisable that you start trading only at the end of the day, but the wait and watch policy before giving it a full throttle may steer you surely to success.

An online Forex trader is always prompted by certain emotional parameters and over trading blends with his normal trading even without his consciousness. This is also true that over trading is not always harmful. Experts have found glittering results in some cases of over trading. The caution is primarily for the struggler in online Forex trading, for whom success has been eluded for long.

Reffer : etoronews.com

Online Forex broker can accelerate the momentum

The world's largest financial market Forex trading entails that forex brokers make suppositions of multiple currencies while selling or buying. In fact unlike his counterpart in the stock exchange he is authorized to sell or buy in any currency of the world of his choice. It is the forex broker, who can provide accurate tips and tricks to his clients through outstanding analysis to really eclipse all previous records of trading. Traditionally banks and other major financial houses use to play the role of the forex broker before the emergence of online forex brokers, who could buy a huge volume of particular currencies. Due to its innate financial strength major international banks used to dominate as the forex trading markets as forex brokers which would also facilitate the clients to trade at any point of time.

As a lot of water has flown down the river Nile, the concept of forex trading has found a revolutionary change in the regime of Internet, where online forex traders have taken over the control of the forex market from the grip of the traditional brick and mortar institutions. As an online forex trader of the twenty first century, you have got even direct access to online forex trading without the dominating influence of the brokers, which is mostly an uncommon scenario even in today’s stock markets. It is also true that the control of brokers at times can save you from serious disaster. The significant advantage of online forex trading is that you get the freedom of going on your own, if you want.

Today, the online forex trader gets the unique opportunity of a much wider access to financial analysts, brokers, news and a view sitting at home only, as Internet has opened up the treasure trove for them. When the online forex trader attempts to trade from home, he can even be associated with online forex brokers, at his own discretion. As online forex trading has added a new dimension in the world of forex, the online forex brokers have become duly educated to provide the effective guidance to the traders. In reality today's forex trading has become more enriched than the prevailing practices of the earlier forex market.

An online forex broker is supposed to throw a glance at the latest developments to literate his clients and even the new comers can ask for a demonstration from them. Some online forex brokers with their huge experience try to target the experienced traders, where the in-depth research has become a must to guide the veteran traders. While choosing the right online forex brokers, you need to set up the criteria on your own and you can find a plenty of them all over the Internet. Its better that you enquire about the online forex broker prior to decision and even you can ask for his clientele.

When you avail a particular online forex trading platform like eToro, you can find a lot of selected online forex brokers by default, who will be helping you to become a winner. Whether you are an experienced trader or a fresh entrant, eToro can guide you in the right direction with the presence of eminent brokers. Never forget your skill and knowledge always helps you to forge ahead irrespective of the guidance of online brokers in you trading.

Buys Merrill Lynch Creating Unique Financial Services Firm - Bank of America

Combines leading global wealth management, capital markets and advisory company with largest consumer and corporate bank in U.S.

CHARLOTTE (September 15, 2008) -- Bank of America Corporation today announced it has agreed to acquire Merrill Lynch & Co., Inc. in a $50 billion all-stock transaction that creates a company unrivalled in its breadth of financial services and global reach.

"Acquiring one of the premier wealth management, capital markets, and advisory companies is a great opportunity for our shareholders,” Bank of America Chairman and Chief Executive Officer Ken Lewis said. “Together, our companies are more valuable because of the synergies in our businesses.”

"Merrill Lynch is a great global franchise and I look forward to working with Ken Lewis and our senior management teams to create what will be the leading financial institution in the world with the combination of these two firms," said John Thain, chairman and CEO of Merrill Lynch.Under terms of the transaction, Bank of America would exchange .8595 shares of Bank of America common stock for each Merrill Lynch common share. The price is 1.8 times stated tangible book value.

Bank of America expects to achieve $7 billion in pre-tax expense savings, fully realized by 2012. The acquisition is expected to be accretive to earnings by 2010.

The transaction is expected to close in the first quarter of 2009. It has been approved by directors of both companies and is subject to shareholder votes at both companies and standard regulatory approvals.

Under the agreement, three directors of Merrill Lynch will join the Bank of America Board of Directors.

The combined company would have leadership positions in retail brokerage and wealth management. By adding Merrill Lynch’s more than 16,000 financial advisers, Bank of America would have the largest brokerage in the world with more than 20,000 advisers and $2.5 trillion in client assets.

The combination brings global scale in investment management, including an approximately 50 percent ownership in BlackRock, which has $1.4 trillion in assets under management. Bank of America has $589 billion in assets under management.

Adding Merrill Lynch both enhances current strengths at Bank of America and creates new ones, particularly outside of the United States. Merrill Lynch adds strengths in global debt underwriting, global equities and global merger and acquisition advice.

After the acquisition, Bank of America would be the number one underwriter of global high yield debt, the third largest underwriter of global equity and the ninth largest adviser on global mergers and acquisitions based on pro forma first half of 2008 results.

Bank of America was advised by J.C. Flowers & Co. LLC, Fox-Pitt Kelton Cochran Caronia Waller and Bank of America Securities. It was represented by Wachtell, Lipton, Rosen & Katz. Merrill Lynch was represented by Shearman & Sterling.

Bank of America
Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, more than 18,500 ATMs and award-winning online banking with more than 25 million active users. Bank of America offers industry leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries and has relationships with 99 percent of the U.S. Fortune 500 companies and 83 percent of the Fortune Global 500. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

Note: Bank of America Chief Executive Officer Ken Lewis, Chief Financial Officer Joe Price and Merrill Lynch Chief Executive Officer John Thain will hold a conference call 8 a.m. EDT on Monday, September 15 for investors. The presentation and supporting materials can be accessed on the Bank of America Investor Relations Web site at
For a listen-only connection to the conference call, dial 877-585-6241 in the U.S. and 785-424-1734 from outside the U.S. The conference passcode is 79795.

Lewis and Thain will also host a press conference at 10 a.m. in the auditorium at Bank of America’s New York City headquarters, One Bryant Park. A webcast will be available at
Merrill LynchMerrill Lynch is one of the world's leading wealth management, capital markets and advisory companies, with offices in 40 countries and territories and total client assets of approximately $1.6 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies with $1.4 trillion in assets under management at June 30, 2008. For more information on Merrill Lynch,

Looking StatementsThis press release contains forward-looking statements, including statements about the financial conditions, results of operations and earnings outlook of Bank of America Corporation. The forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results or earnings to differ materially from such forward-looking statements include, among others, the following:

1) projected business increases following process changes and other investments are lower than expected;

2) competitive pressure among financial services companies increases significantly;

3) general economic conditions are less favorable than expected;

4) political conditions including the threat of future terrorist activity and related actions by the United States abroad may adversely affect the company’s businesses and economic conditions as a whole;

5) changes in the interest rate environment and market liquidity reduce interest margins, impact funding sources and effect the ability to originate and distribute financial products in the primary and secondary markets;

6) changes in foreign exchange rates increases exposure;

7) changes in market rates and prices may adversely impact the value of financial products; 8) legislation or regulatory environments, requirements or changes adversely affect the businesses in which the company is engaged;

9) changes in accounting standards, rules or interpretations,

10) litigation liabilities, including costs, expenses, settlements and judgments, may adversely affect the company or its businesses;

11) mergers and acquisitions and their integration into the company; and

12) decisions to downsize, sell or close units or otherwise change the business mix of any of the company. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Bank of America does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements are made. For further information regarding Bank of America Corporation, please read the Bank of America reports filed with the SEC and available at

Additional Information About this TransactionIn connection with the proposed merger, Bank of America will file with the SEC a Registration Statement on Form S-4 that will include a joint proxy statement of Bank of America and Merrill Lynch that also constitutes a prospectus of Bank of America. Bank of America and Merrill Lynch will mail the joint proxy statement/prospectus to their respective stockholders.