Learning forex??!!
History
History
The foreign exchange market has existed in its present form, called a floating exchange rate regime since March 1973 and the abandonment of fixed exchange rates of various currencies against the dollar standard end of Bretton Woods in 1944.
Treated products
SpotCash (called spot), the main parities were processed in 2004, according to BIS:
* Euro / dollar - 28%
* The dollar / yen - 17%
* The sterling / dollar (Cable said in English) - 14%
Despite the strong development of the euro, the dollar remains the dominant hub, present in 89% of transactions (37% against the euro, the yen 20% and 17% for the pound sterling, all on a total of 200% since each transaction involves two currencies). For a non-European currency XXX, a transaction between the euro and that currency usually decompose a transaction EUR / USD and USD transaction / XXX. The currency pair EUR / XXX is then called a cross. Forward exchange [edit]
The forward exchange consists of two products, both interbank term dry (it is said outright in English), rather little attention, and swaps. Unlike other financial markets, the organized futures markets have never imposed on the foreign exchange market and remain marginal. Currency options [edit]
Finally, the options market exchange is the most diverse and most inventive of the options markets. He is responsible for virtually all forms of so-called exotic options or second generation (barrier options, Asian options, options on options, etc..). Trading and Foreign Exchange [edit] Cover (hedging) [edit]
The principle is to take a position contrary to the position already open, so as to nullify the risk. It is a technique widely used by professionals. This, for example, if a European institutional investor who has agreed to buy U.S. stocks. It is then in foreign exchange risk because if the dollar drops, the euro equivalent of its U.S. titles will fall. To become immune to this risk, it will then sell the equivalent amount in dollars of the shares he has bought. Prediction [edit]
Is to anticipate market movements through an observation more or less advanced financial environment, economic and political. The interest in anticipation of exchange rate movements is speculation. For this, many sources of information are available to the forex trader (Reuters, Telerate, Bloomberg LP) allowing access to all quotes and financial information useful for its trading. It also has access to economic indicators of major countries as well as global financial information. It is able to form an opinion on the evolution of prices or rates and thus to anticipate future movements. Arbitration [edit]
He is trying to take advantage of shifts in one-time prices or rates in the same medium, the same currency on two different markets. The arbitrageur can perform these operations on a single market-for example, spot-or multi-markets such as swaps. Powerful tools (called pricers) enabling it to calculate different prices or interest of an arbitrage transaction. This strategy requires a response and stress management in real time from the trader.
