Foreign Currency Exchange Origins

     How did foreign currency exchange come about? The foreign exchange market that the retail currency trader knows today, has been shaped by a long history of global historical events. Consequently, studying the history of foreign currency exchange can be a lengthy and time consuming process. Although important for cultural and historical reasons, a detailed study of specific historical events like the Bretton Woods accord and the Smithsonian Agreement is not very useful for the modern foreign currency exchange trader. It is more important for a trader that is considering foreign currencies, to understand the logic behind foreign exchange as an efficient medium of exchange for goods and service.

      The barter system was originally used by our ancestors as a means of exchange. Bartering was inefficient as an exchange mechanism because it required that a lot of time be spent in negotiation to strike a deal. Also, much time was needed to search for the goods required for bartering. The barter exchange system was eventually enhanced by the public acceptance of standardized sizes and grades of metals like gold, silver and bronze for the exchange of merchandise. This metal currency for exchange had many advantages including durability and storage. During the middle ages, a variety of paper IOU's started gaining popularity as a medium of exchange.

Throughout the years, people began to realize that carrying around paper currency was a lot more advantageous than carrying heavy bags of precious metals. Consequently, stable governments eventually adopted paper currency and backed its value with gold reserves. This led to the birth of the gold standard. On July of 1944, the Bretton Woods Accord pegged the US Dollar to gold at a price of $35 per ounce. The Bretton Woods Accord also fixed other foreign currencies to the dollar. It lasted until 1971, when US president Nixon let the dollar "float" freely against other foreign currencies and suspended the conversion to gold.

      As we fast forward to the present, the foreign currency exchange market has grown into the largest financial market in the world, with an aggregate daily volume of 1.5 trillion dollars or greater. Even though foreign exchange has traditionally been an institutional (Inter-Bank) market, the growth of the Internet has propelled online currency trading among private individuals to the stratosphere, widening the retail currency trading market considerably.

Currency Trading Market Introduction

      Currency is the ultimate commodity. A foreign currency trade takes place every time a company or government buys or sells products or services in a foreign country; one currency is exchanged for another. A large number of individuals and organizations also do currency trading for speculative purposes. Consequently, it is no surprise that the foreign currency exchange market, also known as "forex" or "fx" market, is the largest financial market in the world. The currency trading market is much bigger (trades more volume) than all the world's stock markets put together. No other financial market even comes close to its sheer size and global reach.

To get an idea of the unbelievable size of the currency trading market, we have to look only at the growth and daily volume in foreign exchange activity. From 1997 to the end of 2000, daily currency trading volume surged from 5 billion to 1.5 trillion dollars. The currency market continues to grow at a phenomenal rate.

In the past, only corporations and wealthy individuals could trade currencies in the currency market through the use of bank proprietary trading systems, which required at least US$1 million to open a trading account. That was before the Internet came along. Now, the market is totally changing. Thanks to modern advancements in online trading technology, investors with only a few thousand dollars can now have 24-hour access to the online currency trading market.

     For day traders and swing traders, the currency market provides an alternative to stock market and futures trading. A trader only has a few major currencies to trade (the Dollar, Yen, British Pound, Swiss Franc, and the Euro are the most popular), whereas he is faced with tens of thousands of stocks to choose from. Currency trading also provides greater leverage than stocks and futures, and the minimum investment required to open a currency trading account is much lower (increasing leverage increases risk). All of these advantages compounded with the ability to choose flexible trading hours (currency trading goes on around the clock), has resulted in many stock traders deserting the stock market to day trade currencies. If you want to try out currency trading, click on the link below:

Exchanging Foreign Currency in New York City

• Exchanging your foreign cash or Traveler's Checks for American cash can easily (though sometimes expensively) be done at Currency Exchange Offices and many of New York City's larger banks.
• Typically you'll get the best rate for buying U.S. dollars once you arrive in the U.S.
• It often makes sense to exchange in bulk -- commission rates often decline as the amount of money exchanged increases.
• Some currency exchange offices offer free (or inexpensive) buy-back programs. Even with popular chains, you will probably have to do the buy-back at the location of the original transaction in order to get the favorable rate.
• Exchange rates are typically better in the city than at the airport currency exchange locations.

Where to Exchange Your Foreign Currency in New York City:
Do call ahead to confirm that a particular branch will be able to accommodate your particular foreign currency.

• Travelex: Find a Travelex NYC Branch (Jamaica = JFK Airport; Flushing = LGA Airport)
• American Express Travel Offices: NYC American Express Travel Office
• Chase Bank Offices: Chase Branch Offices
• Currency Exchange International: NYC CEI Locations

What is the current exchange rate?

• You can find the current exchange rates published daily in the New York Times and the Wall Street Journal.

Learn Currency Trading Strategies From An Experienced Trader And Highly Praised Coach

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WEBWIRE – Thursday, May 19, 2011

Learn currency trading strategies from Bernie Ebner, an experienced and highly praised coach with Successful Forex Traders. Foreign Currency Market (Forex) trading is fast emerging as the market to trade and with Successful Forex Trading, the Trading Coach Bernie Ebner helps novice traders Learn Currency Trading. With approximately $1.5 trillion US dollars trading on the Forex daily, it is attractive to traders offering them:

• 24 hour trading
• No commission trading
• High liquidity

The Forex market also offers traders a higher profit margin on their investments, which is why it is essential to learn currency trading.

    Forex traders must employ a combination of trading fundamentals as well as knowing some technical analysis to be successful Forex traders. To learn currency trading from a reputable coaching site such as (http://forexmarkettradingblog.com/learncurrencytrading) allows novice traders to use live demo accounts and have access to an experienced trader while learning currency trading. Trading is much like a high-performance sport. Athletes wouldn’t train without a private coach and traders shouldn’t trade without one.

http://forexmarkettradingblog.com/learncurrencytrading offers currency traders a user-friendly and intuitive platform that is more than a coach to help them learn currency trading, which includes:

1. An eBook ("The Trading Coach") written by Bernie Ebner filled with the exact fundamentals any trader should know, not only for Forex trading, but that will carry over to Futures markets as well.
2. A newsletter
3. Trading chat
4. Webinars and Seminars
5. One on One coaching

It is estimated that 96% of novice Forex traders will likely lose money and quit trading as a result. Here are some common reasons why that can be counteracted through being coached to learn currency trading:

• Not using enough capital
• Failing to manage a risk
• Being greedy
• Trading Indecisively
• Betting only on Tops and Bottoms
• A refusal to be wrong

To learn currency trading from a coach such as Bernie Ebner will help traders escape the pitfalls of novice trading to become a success and actually learn currency trading the right way.

How is currency trading done?

The Currency trading market is a multi trillion dollar market where world currencies are exchanged back and forth on a daily basis.

How is currency trading done?

Retail currency trading is typically done through brokers and market makers. Traders can place trades through their brokers who will in turn place a corresponding trade on the interbank market.

Why do currency values change?

Currency values can change for many reasons. Sometimes they react to political and economic news, sometimes they are driven by speculators, and sometimes they are driven by international business flows. If companies in the United States are importing large quantities of products made in Europe, they will need to exchange their US Dollars for Euros to pay for the products. When this is done in very large quantity over a short period of time, it raises the demand for Euros and the value of the Euro versus the US Dollar increases. This happens because dollars are being sold on the open market, while Euros are being bought.

Is currency trading risky?

Currency trading can be very risky. Currencies tend to be very volatile compared to other markets. The real key to success with currency trading is to use conservative risk management. There are many components to effective currency risk management, but the bottom line is to use caution and have a trading plan.

Who trades currencies?

Currencies are traded by individual retail investors, financial institutions, and corporations doing business. Retail investors and banks are trade to make profits and corporations usually trade in the normal course of the international business process.

Business for the ordinary Nigerian

     Forex is a business many Nigerians are into. Pastor Ugochukwu talks about that: "If you do a search on Forex on the internet, maybe on google, you will discover that Nigeria likely has the highest number traders. This is because the exchange rate of the naira to the dollar. If you get a dollar, you are making N150, N160, so, a lot of Nigerian youths are into it, but unfortunately, they are also the highest loser. I will say because of greed. A lot of youths believe, because of the exchange rate, 500 or 1000 dollars give you a lot of money. So, they go into it with the appetite to make huge money. But Forex is something one has to be careful about. That is one. Two, you must take away greed. If you must make money in Forex, you must not be greedy; you must trade based on your capital, the amount of money you have rather than going for higher leverage because each of the brokers gives leverage outside the actual amount you have in your account. With a 100 dollar account, with the leverage of the broker, you can trade as somebody who has 1000dollars. But the danger of it is that if you lose, you lose everything. That is a major problem. If you have a lot of money, you can take it one step at time, quietly and gently. But a lot of Nigerians want to go in and make huge amount at once.

"As a result of inexperience…some go for a one day seminar and go in and believe they are gurus, they go in, pump their money in and end of losing money. Forex is something you need experience. That is why most of the platforms or brokers will give you what is called demo accounts to practise, that is trading visual money to horn your strategy.

      It is a genuine and very lucrative business that Nigerians can go into. Many individuals and financial organisations in Nigeria are into it. With the right knowledge and money, with the right tools; also with the right brokers because some of the brokers are scammers, with all these an average Nigeria can go into the business even with as little as 100 dollars, about N15,000.

Forex Trading Update

Daily Forex Market Commentary from DailyFX

    The EURUSD made another run at 1.3500 on Tuesday amid optimism surrounding the European Central Bank’s second Long Term Refinancing Operation, and currency traders may show a positive response to the outcome as the Governing Council takes additional steps to shore up the ailing economy. Indeed, there’s speculation that the results of the second LTRO will draw less demands compared to the EUR 489B offered back in December, but we may see a sharp reversal in the exchange rate should we see the three-year loan facility exceed market expectations. As commercial banks across Europe try to shore up their balance sheets, financial instructions may horde the cheap cash, and the ECB may have little choice but to expand monetary policy further as the region slips back into recession. In turn, the lack of momentum to clear 1.3500 could pave the way for a short-term reversal in the EURUSD, and the exchange rate may track lower going into March should the fundamental outlook for the euro deteriorate further.

Forex: USD Threatens Upward Trend, Fed Doves to Speak On Economy

    The reserve currency came under pressure on Thursday, with the Dow Jones-FXCM US Dollar Index (Ticker: USDOLLAR) tumbling to a low of 9,815, and the greenback may weaken further over the next 24-hours of trading as market participants ramp up their appetite for risk. As the USDOLLAR threatens the upward trending channel from earlier this month, a break below the 10-Day SMA (9,817) would negate our bullish outlook for the reserve currency, and we may see the index further retrace the rebound from 9,672 as a slew of Fed doves are scheduled to speak on the economy tomorrow. However, as new home sales in the world’s largest economy is expected to increase 2.6% in January, the improvement in the housing market may prop up the greenback as the development dampens the scope for another round of quantitative easing.

Forex: Euro to Threaten Key Resistance As Business Sentiment Improves

     The euro held a narrow range on Wednesday amid the renewed threats of a Greek default, but a rise in German business confidence may prop up the single currency as the data reinforces an improved outlook for the euro-area. Business confidence in Europe’s largest economy is expected to tick higher for the fourth month in February, and the development may spur a bullish reaction in the EURUSD as it raises the prospects for a more robust recovery. However, as the EURUSD remains well capped by the 100-Day SMA at 1.3311, the initial reaction to the release could be short-lived, and broader fundamental themes may continue to dictate price action for the euro-dollar as the ongoing turmoil in Europe drags on investor confidence.

Forex: British Pound to Benefit from Less Dovish BoE Minutes

    The British pound struggled to hold its ground on Tuesday as market participants scaled back their appetite for risk, but the sterling may regain its footing over the next 24-hours of trading should the Bank of England continue to soften its dovish tone for monetary policy. Although the BoE quarter inflation report has taken some steam out of the policy meeting minutes, the statement may instill a bullish outlook for the sterling as central bank officials expect to see a more robust recovery this year. In turn, we may see the Monetary Policy Committee endorse a wait-and-see approach throughout the first-half of the year, and the central bank may see scope to conclude its easing cycle in 2012 as the fundamental outlook for the UK improves. At the same time, members of the MPC may keep the door open to expand the asset purchase program beyond GBP 325B amid the recession in the euro-area, and we may see a growing rift within the BoE as the region continues to face a risk of a double-dip recession.

Forex: US Dollar Weakness to Be Short-Lived On Core Inflation

     The greenback traded heavy during the North American session, with the Dow Jones-FXCM US Dollar index (Ticker: USDOLLAR) slipping to a low of 9,798, but we may see the reserve currency trade higher over the next 24-hours as the stickiness in price growth dampens the prospects for another round of quantitative easing. Although the headline reading for US inflation is expected to expand at a slower pace in January, core consumer prices are anticipated to hold steady at the highest level since October 2008, and the stickiness in underlying inflation could prop up the USD as the development limit’s the Fed’s scope to push through another large-scale asset purchase plan. As the fundamental outlook for the world’s largest economy improves, we should see the Federal Reserve continue to soften its dovish tone for monetary policy, and the central bank may endorse a wait-and-see approach throughout the first-half of 2012 as Fed officials anticipate a more robust recovery for 2012.

Currency Futures Trading

Currency Futures Trading Defined and Explained

       Currency Futures is defined are a transferable futures contracts that specify a price at of a specific currency that can be bought or sold at a future date.

Currency futures allow traders to hedge against foreign exchange risk. These contracts correlate with the market daily.

Currency Futures Trading

     The New York Board of Trade (NYBOT) trades currency futures and establishes pricing and standards for traders.  Foreign exchange trading continues to be expanded to include a wide variety of countries in different regions. All FINEX currency futures trade on a quarterly basis, listing contracts for March, June, September and December 

Currency Futures Trading Software

     Having the right tool for the job is critical.  Ask any currency trader what trading tools or types of financial analysis he is using and you're probably going to hear Stochastics, Fibonacci, MacD, moving averages, etc.  Trading software can be used to augment an existing approach by supplying a broadened perspective. The key to a currency trading system is its ability to forecast moving averages! One of the better software products is VantagePoint trading software that will help to “see” what is likely to happen in the market that you are trading before other traders (using only single-market analysis) catch wind of it. Frequently the crossover indicator flashes an “early warning” that the currency futures market is likely to make a top or bottom - before it actually happens!