|
|
|
Currency Trading: Getting Wealthy From Currency Trading Program
What is currency trading?
How can you get rich and powerful from currency trading?
Who can do currency trading?
Can you do currency trading from any country of the world?
Until six years ago, when the United States Congress passed a law and...
FOREX Trading
Copyright 2005 Dave Markel
The Foreign Exchange market, also referred to as the "FOREX" or
"FX" market is the largest financial market in the world, with a
daily average turnover of US$1.9 trillion - thirty times larger
than the combined...
Home Based Business Opportunity: Secrets Of Success In Home Based Business Opportunity, Exposed
Do you have a home based business opportunity or program? Are you doing any affiliate program? What type of home based business opportunity are you doing? Are you a shining success in the home business opportunity that you’re doing? Are you...
Sending signals for trading in forex
FOREX SIGNALS
Sending signals for trading in forex
Forex signals are sent by a forex firm to their subscribers in order to buy and sell currencies. These signals are called entry and exit signals for the forex dealers. The firms, which send this...
To be or not to be a psychological currency trader?
Currency trading, just like other trading fields, involves the
risk of loss. This risk increases because of the trader's
psychological weaknesses. Human features make the difference
between the successful and always loosing investor. Here's...
|
|
| |
|
|
|
|
|
|
How does foreign exchange affect your business?
How does foreign exchange affect your business?
Taking on risk
Businesses with operations overseas often take upon unnecessary risk when trading goods and services. When buying or selling shipments of electronics, for instance, the terms of contract often require a payment at a later date. This time delay produces a substantial risk as the medium of exchange, domestic or foreign currency often changes in value depending on factors such as economic releases, supply and demand, and governmental policy.
To full illustrate the repercussions of a shift in an exchange rate, let’s examine the effects of the revaluation of the Chinese Yuan that occurred in July of 2005 on potential business dealings. First, the revaluation hurt any venture that exported goods or services from China. When China revaluated its currency and dropped its peg value from 8.31 to 8.11 Yuan to the dollar, the appreciation caused all goods and services from China to become more expensive. Investors and buyers now found themselves paying more for the same amount of goods or services. Second, the 2.5% move was modest in nature, and even expected by many speculators, but global price action ensued and the foreign exchange markets moved wildly.
Currency risk threatens any business with commercial relationships with countries experiencing substantial changes in its economies. Dealing with Japan, for example, is difficult since the Japanese restriction on capital outflow and rocky economic recovery make the exchange market for the dollar-yen volatile. If a business did not hedge its risk when trading in yen, it is exposing itself to a high degree of currency rate risk. Sudden changes can be disastrous for businesses that do not plan ahead by detracting from its bottom line.
Hedging
Hedging currency volatility is a vital component of protecting businesses from risk. To continue the revaluation example, a business owner with a contract to buy Japanese goods in United States dollars without a hedge would have encountered a ruinous blow during the revaluation. The Chinese Yuan caused the Japanese yen to increase in value against the dollar by over 200 pips.
The dollar collapsed in the wake of the move and hit a low of 110.36 in early New York trading.
Individuals and businesses can easily reduce exposure to currency risk by taking positions in the spot currency market. If a US company doing business with the UK wants to protect itself against a depreciating dollar, then the appropriate hedge would be to sell dollars and buy pounds in the spot currency market. By using a trading account, such as one from Forex Capital Markets (http://www.fxcm.com), the business can customize the amount of leverage it uses up to 100:1, so that a hedge is possible at a low cost.
A clear example of the necessity of a hedge is if an American importer is expecting a shipment of 400,000 euros worth of British goods in four months. Since his supplier will want payment in local currency, the importer will need to convert his dollars to euros. He will not be making a payment until the goods are delivered, however, and therefore the risk that the dollar may decline creates a possibility that the goods may be more expensive.
To hedge his risk, he buys 400,000 pounds in the currency market. If the dollar depreciates, and pound subsequently appreciates, his profit in his trading account will completely counterbalance any losses he would have incurred during his purchase of his suppliers’ goods.
Hedging is an effective and affordable way to protect against unforseeable price action in the currency spot market. Since up to 100:1 leverage is available in most trading accounts, relatively little initial capital is needed to create a successful hedge. Trades can be made quickly over the Internet and at a fixed spread at online currency trading sites such as Fxcm.com.
---------------------------------------------------------
Victor Siu is a contributing writer for GoCurrency.com (http://www.gocurrency.com). GoCurrency provides information on global exchange rates, movements and news related information.
About the Author
Victor Siu is a contributing writer for GoCurrency.com (http://www.gocurrency.com). GoCurrency provides information on global exchange rates, movements and news related information.
|
|
|
|
|
| Currency Trading, Forex Trading, Forex, Online Currency Trading |
| Offers 24 hour online currency trading for institutions and professional traders. |
| www.fxcm.com |
|
| OANDA FXGame - Currency Trading Demo Platform |
| You can start playing the currency trading market with real market conditions ... The platform was created with the goal of making currency trading ... |
| fxgame.oanda.com |
|
| Forex | Forex Trading | Forex Minis | Online Currency Trading |
| FOREX.com - THE site for forex trading. 24hr commission-free currency trading w/ real time execution and guaranteed fills. Forex mini accounts from $250, ... |
| www.forex.com |
|
| Currency Trading News, Forex Trading News, FX News, Forex News |
| Currency Trading News, Forex Trading News, FX News, Forex News - Daily FX. |
| www.dailyfx.com |
|
| Currencies - Currency Converter & Latest Rates at CNNMoney.com |
| Dec 6 1:18pm ET †, US $, UK £, Japan ¥, Euro €. US $, 0.5079, 115.05, 0.7517. UK £, 1.969, 226.50, 1.4798. Japan ¥, 0.008692, 0.004415, 0.006533 ... |
| money.cnn.com |
|
| FOREX Advisory |
| The CFTC urges you to be skeptical when promoters of foreign currency trading claim that their services or account management will earn high profits with ... |
| www.cftc.gov |
|
| Forex Trading: Online Currency Trading from Global Forex Trading |
| Global Forex Trading is the premier online foreign currency trading firm and a primary market maker. To learn more about forex trading, visit GFTForex.com. |
| www.gftforex.com |
|
| Amazon.com: Foreign Currency Trading: From the Fundamentals to the ... |
| Amazon.com: Foreign Currency Trading: From the Fundamentals to the Fine Points: Books: Russell Wasendorf by Russell Wasendorf. |
| www.amazon.com |
|
| Forex, Online Currency Trading, FX, Foreign Exchange | ACM Forex |
| Forex Trading with The Forex Broker. ACM offers online currency trading, commission-free, tax-free, lowest forex spreads on the market, guaranteed fills, ... |
| www.ac-markets.com |
|
| OANDA FXTrade - Currency Trading, Forex Trading, Online Currency ... |
| Currency Trading with FXTrade, leader in online currency trading, provides real-time execution, free forex charts and quotes, and 24 hour forex trading. |
| https: |
|
| Forex-Day-Trading.com - Currency Trading with FREE Training |
| Learn how to day trade currencies with our free training. Try a free forex trading demo for 30 days. |
| www.forex-day-trading.com |
|
| Forex Online Currency Trading: Welcome to Global Forex |
| Global Forex offers online currency forex trading at inter-bank FOREX rates. Try our FREE online forex demo trading system. |
| www.globalforex.com |
|
| Forex trading - Realtime Forex online currency trading |
| Realtime Forex offers commission-free online currency trading on live foreign exchange prices. Realtime Forex’s currency trading service also includes free ... |
| www.realtimeforex.com |
|
| Forex Blog |
| Forex news blog with daily commentary. Has a good beginner's article. |
| www.forexblog.org |
|
| Common Questions About Currency Trading |
| Whether you're puzzled by pips or curious about carry trades, your queries are answered here. |
| www.investopedia.com |
|
| OANDA FXTrade - Currency Trading Basics |
| Currency Trading Basics. Exchange Rates and Spreads: ... In currency trading, these codes are often used to express which specific currencies make up a ... |
| fxtrade.oanda.com |
|
| Currency trading, free forex charts, news and analysis |
| Online currency trading with technical analysis, charts and forex news. |
| www.gfforex.com |
|
| Finance - Currency-Trading Ezine Articles |
| EzineArticles.com allows ezine or email list publishers to upload or download free expert content that can be used within email newsletters or websites. |
| ezinearticles.com |
|
| MGFOREX |
| MG Financial Group - Forex, FX, Online Forex Trading. |
| www.mgforex.com |
|
| DirectoryM - Debt Settlement Solutions |
| Simply provide your contact details and describe your needs to receive a free consultation from business or personal debt service providers. |
| www.directorym.com |
|
|