Characteristics of Forex Market

1st, It consists market but no trading field
The finance industry in the western countries consist two sets of systems, namely the centralism business central operation and there is no fixed place for such business network. Stock trading is being traded through stock exchange. Like the New York Stock Exchange, the London stock market, the Tokyo stock market, respectively is American, English, the Japanese stock main transaction place, it is a centralism business financial commodity, its quoted price, the transaction time and hand over to the procedure all consist of unification the stipulation, and has established the same business association, it has formulated the same business rules. The investor could buy and sells the commodity through the broker company, this is known as "consist of trading market and trading field".

But foreign exchange business is done without any unification operation market and business network, it has no centralism unified place like the stock transaction. But, the foreign currency trading network actually is globally, and it has formed a organization which has no formal organization, the market is relied through an approval way and the advanced information system, Forex traders do not consist any membership qualification for any organization, but must obtain colleague’s trust and approval. This kind of Forex market which has no trading field is known as "consist of market but no trading field". Each day, the trading volume in the global Forex market involves billions of U.S dollars, the so huge large amount fund, is being control under both the non-centralism place and non central governance system, plus it is settle based on non-government governance.

2nd, Circulation work
Due to the different geographical position of the various financial centre, the Asian market, the European market, the Americas market because of the time difference relations, it has become an entire day 24 hour continued operation whole world foreign exchange market.

Early morning 0830 (New York time) New York market opens, 0930 Chicago market opens, 1830 Sydney opens, 1930 Tokyo opens, 2030 Hong Kong, Singapore open, before dawn 1430 Frankfurt opens, 1530 o'clock London market opens. So 24 hours uninterrupted movements, the foreign exchange market becomes a day and night market, only on Saturday, Sunday as well as the various countries' significant holiday, the foreign exchange market only then can close.

This kind of continued operation, provided no time and spatial barrier ideal outlet for investors, the Forex trader may seek the best opportunity to carry on the transaction. For instance, Forex trader buys up the Japanese Yen in the morning at the New York market, in the evening Hong Kong market opens the Japanese Yen rises, the Forex trader sells in the Hong Kong market, no matter Forex trader in where, he all may participate in any market, any time business. Therefore, the foreign exchange market may say is does not have the time and the spatial barrier market.

3rd, Zero and Game
In the stock market, the rise or the drop of stock market could influence the value of the stock whether to rise or drop, for example the Japanese new date iron stock price falls from 800 Japanese Yen to 400 Japanese Yen, the value of this stock has been reduced to half. However, in the foreign exchange market, the value of a stock and a currency is being calculated differently, this is because the exchange rate is refers to the exchange ratio both countries currency, the exchange rate change will influence one kind of monetary value to reduce and at the same time another kind of monetary value increase. For instance in 22 years ago, 1 US dollar exchanges 360 Japanese Yen, at present, 1 US dollar exchanges 110 Japanese Yen, this explains the Japanese Yen currency value rise, but US dollar currency value drops, in the end the value will not reduce or increase. Therefore, some people described the foreign currency trading is "zero and the game", exactly said is the wealth shift.

In recent years, investment foreign exchange market fund has continuously increased, the exchange rate fluctuation expands day by day, urges the wealth shift to be larger, the daily trading volume of the global foreign exchange involves 150 billion US dollars, the rise or falls 1%, means that the 150 billion funds has been shifted. Although the foreign exchange rate change is very big, but, any kind of currency will not become waste paper, even if some kind of currency unceasingly falls, however, but generally it represents certain value, only if such currency has been abolished.

Foreign Exchange (Forex) Market

Presently, there are various kinds of financial market, it is divided into: Stock market, interest market (including bond, commercial bill and so on), gold market (including gold, platinum, silver), futures market (including grain, cotton and kapok, oil and so on), option market and foreign exchange market or forex market and so on.

The foreign exchange market is a place to trade foreign exchange currency, or it is also a place for the transaction of all foreign currency. The foreign exchange market therefore is existence, because of:

Trade and investment
Import and export business, people pays one kind of currency when doing business, but when earns another kind of currency when receive the commodity. This means that, when settling account, business people will pay and receive different currencies. Therefore, they must convert the currencies that they received into the currencies that they could buy commodities. With this similar, when buying a foreign property a company must use the concerned country's currency to make payment, therefore, it needs to convert the domestic currency is concerned country's currency.

Speculation
Currencies exchange rates could fluctuate according to the demand and supply between two currencies. A Forex trader buys up one kind of currency in an exchange rate, but up casts this currency in another more advantageous exchange rate, he may gain. Speculation has occupied most of the Forex market.

Hedging
Due to the fluctuation between two currencies, those companies who owns foreign asset (for example factory), when these companies convert these properties into cost country currencies, there consist of certain risks. When the value of a foreign asset which is estimated based on foreign currencies remained unchanged, if the exchange rate changes, when converting this property value according to the domestic currency, there could be profit and loss. The company may eliminate such hidden risk through hedging. This carries out a foreign currency trading, its transaction result just counterbalances the foreign currency property profit and loss which produces by the exchange rate change.

Forex Market Development
The history of the Forex market as an international capital speculation market is much shorter compared the stock, the gold, the stock, the interest market, but it is developing in an astonishing speed. Today, the foreign exchange market daily trading volume has amounted to 150 billion US dollars, it’s scale has gone far beyond the stock, the stock and other finance commodity markets, it has became the world's most biggest sole finance market and the also the speculation market. Since the birth of the foreign exchange market, the fluctuation of the exchange rate of the Forex market is becoming bigger. In September 1985, 1 US dollar exchanged 220 Japanese Yen, but in May 1986, 1 US dollar only could exchange 160 Japanese Yen, in 8 months, the Japanese Yen has revalued 27%. In recent years, the foreign exchange market wave amplitude has been bigger, on September 8, 1992, 1 pound exchanged 2.0100 US dollars, on November 10, 1 pound exchanged 1.5080 US dollars, in the short two months, the pound exchanged US dollar exchange rate to fall more than 5,000, depreciated 25%. Not only that, presently, everyday the fluctuation of the exchange rate of the Forex market enlarges unceasingly, within a day the rise and drop 2% to 3% is commonly seen. On September 16, 1992, the pound exchanged US dollar from 1.8755 to fall to 1.7850, the pound on first lowers 5%.

Due to the large fluctuation of the Forex market, it has created more opportunities for the investor, attracted more and more investors to join this ranks.

Foreign Margin Markets

Comparing to other investment, the Foreign Exchange margin trading is one of the fairest and the most attractive investment method. The Foreign Exchange margin trading meaning the traders borrow loan from bank, finance organization or broker house to carry on the foreign currency trading. Generally, the financing proportion is above 20 times, which means the Forex traders’ fund may enlarge to 20 times to carry on the trading. The bigger the financing proportion, means the Forex traders just need to pay very less fund, for example, the financing proportion provided by the financial organization is 400 times, namely the lowest margin request is 0.25%, the traders just need to pay 25 US dollars, then he or she could trade as high as 10,000 US dollars, fully using the contra method to make big profit by only paying a very less price. Besides the fund enlargement, another attraction of the Forex margin trading method is that it can be traded in both ways, you can make profit by buying the currency when the currency rise (makes many), or to sell a currency when the currency is dropping to make profit (short-selling), thus does not need to be restricted by the restriction so-called bear market is unable to make money. Making Profit in the Foreign Exchange Market The currency fluctuate continuously due to reasons such as political, economical reasons, sometimes the changes could be extremely great, therefore, the Forex traders also can have the opportunity in among which makes a profit. For example, the Japanese Yen daily fluctuation is probably between 0.7% to 1.5%, Forex traders may make profit through buying and selling. All trading could be completed in a short time, the trading strategy could be carry up according to the market conditions, it is extremely flexible, even if the direction looks wrong, the lost could be stop immediately, the lost could reduce but profit potential is still great. Therefore, the Foreign Exchange margin trading is the most flexible and the most reliable investment method. Foreign Exchange Margin Trading elementary knowledge
Currency name	Commonly used currency code
Singapore dollar Thai Bath Swedish krona Danish Krone Norwegian krone Spanish peseta German Mark US dollar Euro Japanese Yen Pound Swiss franc Australian dollar New Zealand Yuan Canadian dollar Hong Kong dollar French franc Italian lira Belgian franc	SGD THB SEK DKK NOK ESP DEM USD EUR JPY GBP CHF AUD NZD CAD HKD FRF ITL BEF

US Dollar down

Published on Mon, Mar 09 2009

The US dollar pulled back harshly throughout European trading, but then went up higher gradually on flight to quality after the news that US non-farm payrolls dropped corresponding to anticipations by 651,000 in February. The outcomes in fact mirror an unexpected, but very minor progress from the 2 months ago because of adjustments. Certainly, the January outcome were altered down to -655,000 from -598,000 while the December outcome were altered down to -681,000 from -524,000, showing the single most horrible monthly fell since October 1949. Job losses can be seen throughout the board in the manufacturing, retail, financial, business services, and hospitality divisions.

Rising damages in worldwide economic Markets

Published on Mon, Mar 09 2009

Economic and financial situation are deteriorating. And, in spite of the worldwide attempt to alleviate markets and revitalize augmentation, it is only a matter of time before weak confidence opens doors to panic yet again. Signs of establishing damages are noticeable in economics, market operations and surely price. Examining the market’s more usual asset classes, the sense of risk aversion is instantly recognizable. The FTSE 100 has closed pushed to 6 year lows, the Dow Jones Industrial Average has outpaced its fall in the great recession to close for 12 year lows and the Nikkei 225 is just off of levels not seen in a quarter of a century.

Can US dollar still remain as safe heaven?

Published on Thu, Mar 12 2009

Looking at recent situation it’s difficult to see if we can still take US Treasuries as the risk-free assets or not. Apparently the safe-haven position that has advocated the world’s most liquid currency for almost 8 months currently is beginning to confront struggle. Growth predicts for the US keep on reducing as policy attempts dropped short of a consumer and credit-led force in economic movement. On the contrary, the FX market’s distinctive high yielders are in fact finding economic projections that indicate a fast revival. It is making these currencies gainful for both their sound fundamentals and relatively high return. But sentiment after expansion projections and sentiment according to liquidity come under 2 very diverse states of anxiety and risk.

Not enough time for finance ministers and central bankers

Published on Mon, Mar 16 2009

For how long do policy-officials need to get financial expansion and steady the economic markets? If the international leaders are not able to reach an important, joint policy response to the world’s slump, the situation most likely to get poorer. How much worse? These are the most popular and should-be popular questions the market is struggling with currently; and throughout the coming weeks and months, traders ought to very carefully examine and pay a very close attention on ‘just how bad can things actually become.’ While the fundamental position for general risk trends is not hopeful, carry interest got a major increase this past week. The Index went up more than 650 points from last Friday, indicating a important break above resistance in the force-ridden.

US retail sales may influence risk trends

Published on Thu, Mar 12 2009

US dollar price action was mainly to blame for much of what occurred over the forex markets on Wednesday, as the DXY index at last broke under severe trend-line support, indicating the currency is officially spinning below. There was not much in the way of fundamental news for the US, but that is going to be different on Thursday as the Commerce Department is predicted to reveal that US retail sales drop negative for the 7th time throughout the last 8 months in February, as worsening labor markets, tight credit situations, and a year-long depression influence badly on the minds of consumers. More particularly, advance retail sales are expected to have contracted 0.5 % throughout the month, and keeping out auto sales are predicted to have drooping 0.2 %, marking what might result in being a steady trend throughout the 1st half of 2009.

US dollar extending losses

Published on Mon, Mar 16 2009

US Dollar flaw is ready to go on in the upcoming week as an upward correction in risky assets gives capital out of risk free assets in seek of yield. Last week, the US Dollar Index decisively broke under an increasing trend line that had directed prices higher from mid-December, showing the way for an extensive pullback in opposition to the range of main currencies. In fact, the US dollar average value in opposition to its major counterparts is at present -93.7 percent inversely related with the MSCI World Stock Index.

<< Pakistan Business News •Pakistan to receive WB $ 500m before March 31 •US economy falls 6.3% in fourth quarter •Gold import falls by 77 percen

For how long do policy-officials need to get financial expansion and steady the economic markets? If the international leaders are not able to reach an important, joint policy response to the world’s slump, the situation most likely to get poorer. How much worse? These are the most popular and should-be popular questions the market is struggling with currently; and throughout the coming weeks and months, traders ought to very carefully examine and pay a very close attention on ‘just how bad can things actually become.’ While the fundamental position for general risk trends is not hopeful, carry interest got a major increase this past week. The Index went up more than 650 points from last Friday, indicating a important break above resistance in the force-ridden.

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