What is a Pip?

A pip is the smallest price increment in forex trading – pip stands for percentage in point. Prices are quoted to the fourth decimal point in the forex market – for example EUR/USD might be bid at 1.1914 and offered at 1.1917. In this example we can see that the spread is 3 pips wide. …

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What is a Trading System?

A trading system is a collection of formulas and rules that generate buy and sell recommendations. Trading systems have been developed for decades, but the recent advances in technology with the pc and internet have increased interest in them and broadened the number of people actively involved in their use. Technical indicators such as oscillators, …

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Forex vs. Currency Futures

By Carley Garner The Forex market has quickly become a popular playground for speculative trading; but is it the best arena to be trading currencies?  Those looking to profit from fluctuations in currency valuations have two primary trading forums, the spot market often referred to Forex or simply FX, or currency futures which are primarily …

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Forex Trading Strategies

Successfully trading the forex market on an intraday basis requires precision and a very careful selection of trades.The enormous scope of the trillion dollar, 24 hour, globe spanning fx market presents a miriad of opportunities for the short term trader – however a day trader in this market must be aware of certain inherent factors …

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Exotic Carry Trade Strategies

The Carry Trade strategy in forex trading involves buying a high yielding currency and selling a lower yielding currency. In doing this you will capture the interest rate differential. For example if the New Zealand Dollar has an interest rate of xx and the Japanese Yen has an interest rate of xx. If an investor …

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FX Rollovers

Rollover describes the process where the settlement of an open trade is rolled forward to another value date. In the Forex Market trades must be settled within two business days. However, open positions can be swapped forward to the next settlement date. Normally, open positions are automatically rolled forward. The interest rate for such a …

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Plaza Accord and the Devaluation of the US Dollar

Methods of regulating the foreign exchange market – such as fixing currency values to a commodity such as gold, or setting maximum exchange rate fluctuations had proven to too rigid. After the regulatory mechanisms- such as the gold standard, the Bretton Woods Accord and the Smithsonian Agreement – were no longer in place, the currency …

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The Foreign Exchange Market

By Peter Pontikis ‘Foreign exchange,’ ‘Forex’ or ‘FX’ is the home of the inter-bank and wholesale market for exchanging one currency for another and thrives in what is an enormous sea of money. It trades across the globe in over 100 currency pairs in the largest of the world’s financial markets! Institutional FX Basically, Institutional …

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