Knowing All The Forex Terms

Accrual - The apportionment of premiums and discounts on forward exchange transactions that relate directly to deposit swap (Interest Arbitrage) deals , over the period of each deal.

Appreciation - A currency is said to ‘appreciate’ when it strengthens in price in response to market demand.

Arbitrage - The purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market, in order to take advantage of small price differentials between markets.

Ask (Offer) Price - The price at which the market is prepared to sell a specific Currency in a Foreign Exchange Contract or Cross Currency Contract. At this price, the trader can buy the base currency. In the quotation, it is shown on the right side of the quotation. For example, in the quote USD/CHF 1.4527/32, the ask price is 1.4532; meaning you can buy one US dollar for 1.4532 Swiss francs.

Bear Market - Someone who believes the prices/market will decline.

Bid - The price that a buyer is prepared to purchase at; the price offered for a currency.

Bretton Woods Accord of 1944 - An agreement that established fixed foreign exchange rates for major currencies, provided for central bank intervention in the currency markets, and set the price of gold at US $35 per ounce. The agreement lasted until 1971. See More on Bretton Woods.

Bull Market - A market characterised by rising prices.

Broker - An agent who handles investors’ orders to buy and sell currency. For this service, a commission is charged which, depending upon the broker and the amount of the transaction, may or may not be negotiated.

Cable - Dealers slang for the Sterling/US Dollar exchange rate.

Call Rate - The overnight interbank interest rate.

Cash Market - The market for the purchase and sale of physical currencies.

Convertible Currency - Currency which can be freely exchanged for other currencies or gold without special authorisation from the appropriate central bank.

Counter Party - The customer or bank with whom a foreign deal is made. The term is also used in interest and currency swaps markets to refer to a participant in a swap exchange.

Cross Rate - An exchange rate between two currencies, usually constructed from the individual exchange rates of the two currencies, measured against the United States dollar.

Currency Risk - The risk of incurring losses resulting from an adverse change in exchange rates.

Currency Swap - Contract which commits two counter-parties to exchange streams of interest payments in different currencies for an agreed period of time and to exchange principal amounts in different currencies at a pre-agreed exchange rate at maturity.

Currency Option - Option contract which gives the right to buy or sell a currency with another currency at a specified exchange rate during a specified period.

Currency Swaption - OTC Option to enter into a currency swap contract.

Currency Warrant - OTC Option; long-dated (more than one year) currency option.

Day Trading - Refers to opening and closing the same position or positions within one day’s trading.

Dollar Rate - When a variable amount of a foreign currency is quoted against one US Dollar, regardless of where the dealer is located or in what currency he is requesting a quote. The exception is the Sterling/US Dollar rate (cable) which is quoted as variable amount of US Dollars to one Sterling.

EMS - Abbreviation for European Monetary System, an agreement between member nations of the European Union to maintain an alignment between the exchange rates of their respective currencies.

European Monetary Unit - The principal goal of the EMU is to establish a single European currency called the Euro, which will officially replace the national currencies of the member EU countries in 2002. Currently, the Euro exists only as a banking currency and for paper financial transactions and foreign exchange. The current members of the EMU are Germany, France, Belgium, Luxembourg, Austria, Finland, Ireland, the Netherlands, Italy, Spain and Portugal.

Federal Reserve (Fed) - The Central Bank of the United States.

Fixed Exchange Rate - Official rate set by monetary authorities for one or more currencies. In practice, even fixed exchange rates are allowed to fluctuate between definite upper and lower bands, leading to intervention.

Flat / Square - To be neither long nor short is the same as to be flat or square. One would have a flat book if he has no positions or if all the positions cancel each other out.

Floating Rate Interest - As opposed to a fixed rate, the interest rate on this type of deal will fluctuate with market rates or benchmark rates. One example of a floating rate interest is a standard mortgage.

Foreign Exchange Swap - Transaction which involves the actual exchange of two currencies (principal amount only) on a specific date at a rate agreed at the time of the conclusion of the contract (short leg), at a date further in the future at a rate agreed at the time of the contract (the long leg).

Forward - A deal that will commence at an agreed date in the future. Forward trades in FX are usually expressed as a margin above (premium) or below (discount) the spot rate. To obtain the actual forward FX price, one adds the margin to the spot rate. The rate will reflect what the FX rate has to be at the forward date so that if funds were re-exchanged at that rate there would be no profit or loss (i.e. a neutral trade). The rate is calculated from the relevant deposit rates in the 2 underlying currencies and the spot FX rate. Unlike in the futures market, forward trading can be customized according to the needs of the two parties and involves more flexibility. Also, there is no centralized exchange.

Fundamental Analysis - Thorough analysis of economic and political data with the goal of determining future movements in a financial market.

GTC - “Good Till Cancelled”. An order left with a Dealer to buy or sell at a fixed price. The order remains in place until it is cancelled by the client.

Hedging - The practice of undertaking one investment activity in order to protect against loss in another, e.g. selling short to nullify a previous purchase, or buying long to offset a previous short sale. While hedges reduce potential losses, they also tend to reduce potential profits.

High/Low - Usually the highest traded price and the lowest traded price for the underlying instrument for the current trading day.

Initial Margin - The required initial deposit of collateral to enter into a position as a guarantee on future performance.

Interbank Rates - The Foreign Exchange rates at which large international banks quote other large international banks.

Limit Order - An order to buy at or below a specified price or to sell at or above a specified price.

Long Position - A market position where the Client has bought a currency he previously did not hold own. Normally expressed in base currency terms.

Margin - Customers must deposit funds as collateral to cover any potential losses from adverse movements in prices.

Margin Call - A demand for additional funds. A requirement by a clearing house that a clearing member (or by a brokerage firm that a client) brings margin deposits up to a required minimu m level to cover an adverse movement in price in the market.

Market Maker - A dealer who supplies prices and is prepared to buy or sell at those stated bid and ask prices. A market maker runs a trading book.

Offer - The price, or rate, that a willing seller is prepared to sell at.

One Cancels Other Order (O.C.O. Order) - A contingent order where the execution of one part of the order automatically cancels the other part.

Open Position - Any deal which has not been settled by physical payment or reversed by an equal and opposite deal for the same value date.

Over The Counter (OTC) - Used to describe any transaction that is not conducted over an exchange.

Overnight Trading - Refers to a purchase or sale between the hours of 9.00 pm and 8.00 am. on the following day.

Pip (or Points) - The term used in currency market to represent the smallest incremental move an exchange rate can make. Depending on context, normally one basis point (0.0001 in the case of EUR/USD, GBD/USD, USD/CHF and .01 in the case of USD/JPY).

Political Risk - The uncertainty in return on an investment due to the possibility that a government might take actions which are detrimental to the investor’s interests.

Quote - An indicative market price, normally used for information purposes only.

Resistance - A price level at which you would expect selling to take place.

Risk Capital - The amount of money that an individual can afford to invest, which, if lost would not affect their lifestyle.

Rollover - Where the settlement of a deal is rolled forward to another value date based on the interest rate differential of the two currencies.

Settlement - Actual physical exchange of one currency for another.

Short - To go ’short’ is to have sold an instrument without actually owning it, and to hold a short position with expectations that the price will decline so it can be bought back in the future at a profit.

Spot - A transaction that occurs immediately, but the funds will usually change hands within two days after deal is struck.

Spread - The difference between the bid and offer (ask) prices; used to measure market liquidity. Narrower spreads usually signify high liquidity.

Stop Loss Order - An order to buy or sell at the market when a particular price is reached, either above or below the price that prevailed when the order was given.

Support Levels - A price level at which you would expect buying to take place.

Technical Analysis - An effort to forecast future market activity by analyzing market data such as charts, price trends, and volume.

Tomorrow to Next - Simultaneous buying and selling of a currency for delivery the following day and selling for the next day or vice versa.

Two-Way Price - Rates for which both a bid and offer are quoted.

US Prime Rate - The interest rate at which US banks will lend to their prime corporate customers.

Value Date - Settlement date of a spot or forward deal.

Variation Margin - An additional margin requirement that a broker will need from a client due to market fluctuation.

Volatility - A statistical measure of a market or a security’s price movements over time and is calculated by using standard deviation. Associated with high volatility is a high degree of risk.

Whipsaw - slang for a condition of a highly volatile market where a sharp price movement is quickly followed by a sharp reversal.

Yard - Slang for a billion.

No Physical Location

Unlike other financial markets, the Forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another. The lack of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one zone to another across the major financial centers.

A trader in the Forex market involves selling or buying one currency against another. Thus, there is no correlation between the foreign currency market and the stock market. Bull market or a bear market for a currency is defined in terms of the outlook for its relative value against other currencies. If the outlook is positive, we have a bull market in which a trader profits by buying the currency against other currencies. Conversely, if the outlook is pessimistic, we have a bull market for other currencies and traders take profits by selling the currency against other currencies. In either case, there is always a good market trading opportunity for a trader.

The backbone of the Forex market consists of a global network of dealers. They are mainly major commercial banks that communicate and trade with one another and with their clients through electronic networks and telephones. There are no organized exchanges to serves a central location to facilitate transactions the way the New York Stock Exchange serves the equity markets. The Forex market operates in a manner similar to the way the NASDAQ market in the United States operates, thus it is also referred to as an over the counter ( OTC ) market.

The Forex market is so vast and has so many participants that no single entity, not even a central bank, can control the market price for an extended period of time. Even interventions by mighty central banks are becoming increasingly ineffectual and short lived. Thus central banks are becoming less and less inclined to intervene to manipulate market prices.

Memilih Broker forex. Sebagai contoh, anda memilih FXCM.
Bisnes Forex nampak sukar. namun kalau kita sudah faham beberapa indikator yang disediakan, ia sangat mudah.

Trade With Intuition

What has Forex trading got to do with intution or gut feelings?

Some people call it urge. Some call it inward witness. Whatever you call it. It will help you in your trade. Let me make it clear to you. Have you ever been thinking of someone and a few minutes later he calls you on phone or he knocks on you door. This is what I am talking about. This is the gut feelings. It may happen to you when you are about to trade and you had the feelings that you should stay out of the market.

Or you had seen by your indicators that the market is going bullish and your intuition says it will be bearish. You go long and later it turns against you. Then you are saying but I have strong feelings that it will go down. It happened to me many times and I will not listen to my gut feelings and I will come out battered. When I began to understand this then I began to follow my intuition and I started making money.

Gorge Soros said he would never trade when his feelings is telling him otherwise. You should know he is one of the best traders in the world.

Felix Homogratus the owner of www.secretforexsociety.com wrote the member of his society to close their carry on trade they were doing on GPD/JPY. He said he saw in a dream a Japanese man waving some papers like yen to him. He interpreted it to mean the yen is gaining strength again. So majority that yielded to his instruction made money while the others lost. This is intuition through dreams. I don’t know how you sharpen you own intuitions I did my own through prayer. Let me end this article with this story.

I heard a story of how the gods were trying to hide the greatest secret of success from human beings. It is the gods’ believe that if it is given freely to humans they will not value it, so they called for suggestions. One of the gods said they should hide it in the deepest sea. This was rejected by the head saying he knows human, they would one day dig down and find it. Another suggested that they should hide it on the highest mountain and it was rejected because they believed humans will eventually climb the mountain and find it. A third suggested they hide it inside them.

This was received with applause. No human being will ever believe that all he needed to succeed is in life is within.

The moral of the story is this, what you need to succeed in Forex trading is right inside of you.

AGLOCO: The Internet's First Economic Network

Today's hottest Internet businesses are all about the power of social networks. Companies like MySpace, Facebook, and YouTube have become worth billions because businesses have realized that these social networks are generating huge advertising and marketing opportunities. As these social networks grow, the economic potential for its owners – and the advertisers who target the site's users – is remarkable.
At AGLOCO, we asked a simple question: The users created the community, where's their share of the profit?
It was from this question that AGLOCO set out to create the Internet's first Economic Network, harnessing the power of Internet-based social networks to directly benefit the Members who help to create the community.
Becoming a member of AGLOCO is as simple as completing a brief sign-up page (name, age, location and email address.). Once you're a Member, you will be asked to then download the Viewbar™ software. (Note: the Viewbar™ software is currently unavailable, as it is in closed testing. It will be ready for public download in a few weeks, and members will be notified when it is available.)

AGLOCO makes money for its Members in many ways:

• Search : Every time you use the Viewbar™ to do an Internet search, AGLOCO earns money from the search engine providers. (For example, Google pays as much as $0.10 on average for each search that is directed to its search engine.)
  
• Advertising : The Viewbar™ itself displays ads that are targeted based upon the websites you're visiting. When you click on an ad and make a purchase, AGLOCO receives a referral fee, which we pass on to our Members. (Please note: Individual members do not receive any compensation for clicking on ads in the Viewbar™, and the Viewbar™ can detect if someone is clicking ads in a fraudulent manner.)
  
• Transaction commissions : Many major retailers pay commissions when you refer customers who make a purchase. AGLOCO collects that commission and passes it on to our members. (For example, Amazon pays an 8.5% commission to most websites who refer customers, and has cut deals for even larger percentages. The bigger the AGLOCO community, the better commission we can negotiate for our Members.)
  
• Software distribution : Numerous software companies pay websites to encourage the download of new software releases (for example, Adobe's Flash and Acrobat Reader software), and trial versions of new programs. AGLOCO members not only get access to the latest and coolest software, they get paid for it.
  
• Service distribution : Many online service providers will look to the AGLOCO community as a source of new and active users for their services. (For example, eBay, Skype, and PayPal, among others, all pay fees to people who help them recruit new active users to their services)
  
• Product distribution : When Members agree to use a product, such as cell phones, high-tech gadgets, office supplies, new credit cards or financial services, AGLOCO can collect referral fees. Some companies even offer special rebate and cash-back programs.

AGLOCO Members make money in four ways.

• Members earn a monthly share of the AGLOCO revenue based on the use of the AGLOCO Viewbar™ that month.
• Members earn part of the company based on the use of the AGLOCO Viewbar™ that month (currently a maximum of five hours are rewarded).
• Members who use our referral system to help build the AGLOCO network will earn more. (AGLOCO only has significant value as a large network and people who help build it should be rewarded. – We also feel that the early users who told friends about YouTube or MySpace or even Google probably deserved something too, but no referral system was available to record their work).
• Members will also get a share of any commissions AGLOCO gets when a Member purchases a product or service from an AGLOCO Sponsor company.

Why should I join now?

• First, it costs nothing to Join and takes less than one minute.
• Second, you can help build the AGLOCO community by recruiting new Members TODAY.
  
  Right now, inviting your friends to join AGLOCO is as easy and productive as it will ever be – but you need to invite your friends before someone else beats you to them.
  
  Remember, the bigger the AGLOCO community, the more attractive AGLOCO is to potential business partners and advertisers.
  
  Recruit your friends and family by contacting them through email. (But remember we have a strict anti-spam policy .) Use your blog and your existing social networks, such as MySpace and Facebook, to contact your friends and encourage them to join a new community that will actually let them earn money.

Be a part of the Internet's first Member-Owned Economic Community. Join AGLOCO - Own the Internet!

Auto and Truck Sales

mportance (A-F): This release merits a C-.

Source: Individual auto manufacturers, seasonal factors by the Commerce Department. Release Time: Varies by auto maker from the first business day to the third business day of the month (data for month prior). In Brief Auto and Truck Sales measure the monthly sales of all domestically produced vehicles. They are considered an important indicator of consumer demand, accounting for roughly 25% of total retail sales. Demand for big ticket items such as autos and trucks tends to be interest rate sensitive, making the motor vehicle sector a leading indicator of business cycles. Each auto maker reports sales individually. The reports are typically released over the course of the first three business days of the month. Using the individual reports, a total annual sales pace can be calculated after applying Commerce Department seasonal factors. It is this annual sales pace that the market refers to when discussing auto and truck sales for the month. In Depth Vehicle sales figures rarely grab the attention of the market probably for two reasons. First, though the specifics of the data are not terribly difficult to understand, their implications are a little hard to trace. Second, unlike many economic releases, vehicle sales are not released all at once and at the same time every month. This makes it difficult for the market to quickly interpret what the numbers mean for the overall consumption picture and to react accordingly. This is what happens in terms of vehicle sales during the course of any given month: The individual vehicle manufacturers report their sales results during the first three or four days of the month. A day after the last manufacturer reports the Bureau of Economic Analysis releases its estimate of unit auto sales. About a week after that the BEA releases its estimate of unit truck sales. The Census Bureau releases its retail sales report, including a measure of sales at automotive dealers, usually around the 13th of the month. Roughly two weeks after that the BEA releases its personal income and outlays release, including a measure of spending on motor vehicles and parts. Each item in this list warrants a more detailed discussion. Manufacturers Most vehicle manufacturers usually always report sales results on the first business day of the month; Ford does not report until the third business day. As these individual results trickle out over the news wires throughout the day, diligent economists and market analysts are busy calculating running totals and applying seasonal factors to them--the BEA supplies factors for the coming six months in advance--in order to come up with approximations for auto and truck sales rates. These figures are some of the first hard spending data for any given month; comparing these derived rates to those from months and years prior is a big help when it comes to formulating a consumption forecast for the month. Unit Sales Once economists and analysts have translated individual sales results into annual rates, they turn to the BEA to provide "official" unit sales rates. Unfortunately, though the BEA is using the same seasonal factors as the rest of us, more often than not it produces unit rates that are modestly different than the ones that market previously had in mind. Thankfully, however, these differences usually pop up in the individual sales categories--domestic car sales, import car sales, domestic truck sales, and import truck sales--but wash out when all the vehicle types are aggregated. Retail Sales With unit sales rates in hand we can proceed to forecast the auto sales contribution to the retail sales figure. And this link is important. In fact, autos often prove to be such a significant swing factor that retail sales are scrutinised on both a total and an excluding-autos basis. It is also worth remembering that the auto term in the retail report is notoriously difficult to estimate; it is not at all rare to see it decline (increase) during a month when unit auto sales rise (fall). Still, by the time the retail sales report rolls around, a few other preliminary spending gauges can be used in conjunction with the unit auto data to get a pretty good read on whether retail consumption rose or fell for the month. Personal Consumption Expenditure With unit sales rates and retail auto spending data in hand analysts can hone their estimates for the auto category in the personal consumption release. Many analysts place relatively more emphasis on the retail auto figures to sharpen their PCE estimates, but the unit auto numbers typically have better predictive power for that series. Besides, it is not commonly known that the BEA does not rely at all on the the retail sales data to produce its consumption estimates. Thus, as an important component of the monthly consumption figures that go directly into the quarterly GDP calculation, the PCE auto data are most important to economic forecasters.

The Forex Market

For the last three decades Foreign Exchange market, - briefly Forex or FX, had integrated into the world's biggest financial market. The volume of daily transactions is about 1-3 trillion of US dollars. The trading instruments on this market are the currencies of different countries, so the fluctuation of currency's rates allows to gain a real profit.

Of course monetary assets of different countries exchanged since the term money appeared as well as an idea to obtain profit from currency's rates difference. Now it is not a new idea, but the transformation of foreign exchange market to the modern stage with an opportunity to conduct conversional operations of such volumes arose only after an introduction of floating rates regime by the state-members of IMF. Within this regime's framework the rate of one currency to another is defining only by the supply and demand on the market.

Presently Forex market is a global telecommunication network of banks and different financial organizations. It does not have any fixed trading place and time restrictions - the trade starts on Monday morning in New Zealand and closes on Friday evening in USA

The advantages of Forex market are:

Round-the-clock trading access: the ability to trade for 24 hours a day;

Liquidity: the market works with a huge money and gives the customers complete freedom to open or close their position of different volume;

Leverage: an ability to use leverage. It decreases requirements to the sum of the initial deposit (margin trade). So in case you deposit 10 000 USD into your account you'd have an opportunity to work with 1 000 000 USD (leverage 1:100);

Objectivity: no exterior regulated structures, so the currency's rate is establishing in accordance with current supply and demand on the market;

Globality: everyone can become a market participant irrespective to the living place, as trading requires only your skills and Internet access.

At present mostly all the operations on the market are conducting only to obtain profit. With the development of Internet and other means of communication this sector of the financial markets becomes more accessible and attractive for the investors of different levels.

So What Is This Secret Anyway?

I can't say too much without giving away the proprietary nature of this secret but I can tell you this, it is a price pattern based on a discovery made by a stock trader in the early 1900's who published his secret in a book which he sold for over $1,500 – the equivalent of three Ford automobiles in his day.

He only sold 1,000 copies and then stopped printing the book. This may have been to keep his secret from becoming too widely publicized. Because so few copies were ever sold, his greatest trading secret is just as effective today as when it was first released.

No this pattern has nothing to do with traditional patterns like head and shoulders, triangles, or wedges – not even close. Although in his book he devotes hundreds of pages to explain these, and other trivial patterns.

In my opinion this was done as an elaborate smoke screen...a goose chase...designed to divert your attention away from his most prized trading secret. In fact, his book is over 440 pages long and he only dedicates 1 page to the disclosure of this incredible trading secret. If you aren't paying attention, you'll skip right over it. That is if you can locate a copy of his book.

This secret completely demystifies the market and can make you very very rich.

No this trader is not the legendary W.D. Gann, this trader kept his secrets much more private. Although it is believed he knew Mr. Gann and may have actually influenced some of Mr. Gann's ideas.