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24 hour trading
One of the major advantages of trading Forex is the opportunity to trade 24 hours a day from Sunday evening (20:00 GMT) to Friday evening (22:00 GMT). This gives you a unique opportunity to react instantly to breaking news that is affecting the markets.
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Superior liquidity
The Forex market is so liquid that there are always buyers and sellers to trade with. The liquidity of this market, especially that of the major currencies, helps ensure price stability and narrow spreads. The liquidity comes mainly from banks that provide liquidity to investors, companies, institutions and other currency market players.
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No commissions
The fact that Forex is often traded without commissions makes it very attractive as an investment opportunity for investors who want to deal on a frequent basis.
Trading the “majors” is also cheaper than trading other cross because of the high level of liquidity. For more information on the trading conditions of Saxo Bank, go to the Account Summary on your SaxoTrader and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary.
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100:1 Leverage
Leverage (gearing) enables you to hold a position worth up to 100 times more than your margin deposit. For example, a USD 10,000 deposit can command positions of up to USD 1,000,000 through leverage. You can leverage the first USD 25,000 of your investment up to 100 times and additional collateral up to 50 times.
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Profit potential in falling markets
Since the market is constantly moving, there are always trading opportunities, whether a currency is strengthening or weakening in relation to anothercurrency. When you trade currencies, they literally work against each other. If the EURUSD declines, for example, it is because the US dollar gets stronger against the euro and vice versa. So, if you think the EURUSD will decline (that is, that the euro will weaken versus the dollar), you would sell EUR now and then later you buy euro back at a lower price and take your profits. The opposite trading scenario would occur if the EURUSD appreciates.

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Spread
The spread is the difference between the price that you can sell currency at (Bid) and the price you can buy currency at (Ask). The spread on majors is usually 3 pips under normal market conditions. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary.
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Pips
A pip is the smallest unit by which a cross price quote changes. When trading Forex you will often hear that there is a 3-pip spread when you trade the majors. This spread is revealed when you compare the bid and the ask price, for example EURUSD is quoted at a bid price of 0.9875 and an ask price of 0.9878. The difference is USD 0.0003, which is equal to 3 “pips”.

On a contract or position, the value of a pip can easily be calculated. You know that the EURUSD is quoted with four decimals, so all you have to do is cancel out the four zeros on the amount you trade and you will have the value of one pip. Thus, on a EURUSD 100,000 contract, one pip is USD 10. On a USDJPY 100,000 contract, one pip is equal to 1000 yen, because USDJPY is quoted with only two decimals.

Taming The Learning Curve!

I was suffering from "analysis paralysis," and then I spent two hours with Vic Noble. If you are looking for an accessible, confident, knowledgeable and a natural-born teacher to teach you how to trade currencies, Vic's "the man." No criticism, no hype and no pie-in-the-sky promises are presented - just the facts, simplified, untangled and laid out for you in an easy-to follow format. It's up to you to do your homework. Highly recommend Vic whether you're a newbie or experienced trader. He clears the cobwebs and gets you on the road to maximizing your potential. Nice job, Vic--- and THANKS! Karl, Kansas City, MO

Vic recently interviewed Robert. For the past 2 years, Robert has continued to forge ahead with his trading in ways that most people only dream about. It was NOT ALWAYS SO!! Robert went through some very tough times. You’re going to hear an interview with someone who truly has the determination, focus, and belief in himself to take his trading to a level where he can now trade on a full time basis, something that so many people have on their wish list.

We hope that these interviews will serve as a springboard to help you in your own trading development by seeing what successful traders do and how they approach the market each day. You’ll see how they all have something that they do consistently — something that they see easily and that they stay focused on at all times!

Robert’s story is particularly inspiring because of the fact that he’s been able to maintain his high level of performance for about 2 years now! That is truly outstanding!

The Breton Woods Agreement was initiated in 1944 in an effort to keep cash from draining out of war-ravaged Europe. Currency movements were limited to 1% against the U.S. Dollar, which was fixed to the price of gold at 35 US Dollars an ounce. The modern era of foreign exchange first emerged in 1971 with the collapse of the Breton Woods Agreement. The U.S. Dollar was no longer convertible into gold and market forces were free to adjust foreign exchange rates, signalling an increase in currency market volatility and trading opportunities.

The collapse in 1973 of the subsequent Smithsonian and European Joint Float agreements signalled the true beginning of the free-floating currency exchange system that drives the markets today. Starting in the 1980’s, computer technology extended the reach of the exchange marketplace. Today, the values of the major world currencies are independent of each other.

Foreign Exchange is a currency market where the trading of one currency against

another takes place. It is often referred to as Forex or FX.

The foreign exchange market is the largest most liquid and most influential market in

the world. It is a truly 24 hour global market, it trades from 9pm GMT Sunday until

10pm GMT Friday and trades in excess of $1.5 trillion dollars a day, Making it far

bigger than the combined total of all the worlds stock exchanges.

Participants in Forex include central banks, corporations, individual investors and

speculators, and hedge funds. With the advent of electronic trading platforms,

self-directed investors and smaller financial firms now have access to the same

liquidity as larger market participants.

Trading, or speculation, makes up 95% of the daily volume. The other 5% of daily

volume consists of governments and commercial companies converting one currency into

another from buying and selling goods and services.

51% of the market is in spot FX transactions, followed by 32% in currency swap

transactions. Forward outright FX transactions represent another 5% of this daily

turnover. Options on inter-bank FX t

Liquidity

The Forex market is the most liquid market in the world. Most speculators focus on

trading the highly liquid Majors where approximately 85% of trading volume occurs.

Other currency pairs are less liquid and therefore increases liquidity risk.

Unlike the stock market, where slippage can be a real concern, high liquidity in

Forex means that trades will generally be filled at the order price. There are always

plenty of buyers and sellers which helps make sure spreads are narrow.


24-Hour Trading

Since the market is almost always open, traders can react to market, economic and

political news as it happens, locking in profits, protecting profits and cutting

losses. The main trading centres are Sydney, Tokyo, London, Frankfurt and New York.

Trading takes place during five overlapping trading sessions starting at 9pm GMT

Sunday evening and ending on 10pm GMT Friday Evening.


Leverage - Trading on Margin

Trading on margin means that a trader can utilize more capital than they have in

their account. The volatility of currency pairs is usually less than other markets,

such as futures and equities. Since there is less movement, traders leverage their

capital to make money on smaller moves. The amount of margin available in Forex is as

high as 1% (100:1 leverage), and generally up to 2% (50:1 leverage). With £2,000 of

capital, you can trade up to £400,000 at 50:1 and £500,000 at 100:1. Your individual

broker will set the level of margin required on your account.

If you were to trade £100,000 GBP/USD you would be required to have at least £1000 at

1% margin or £2000 at 2% margin in your account to open the trade. Trading on margin

is a double edged sword. You can lose money equally as fast as you make it. It is

therefore vital to have a full understanding of the FX market and not commit too much

of your equity to each trade.


Lower Transaction Costs – Tighter Spreads - No Commissions

Most Forex brokers do not charge commissions, but instead make money on the dealing

spread. The Dealing Spread is difference between the bid and ask quote. The Bid is

the price buyers are willing to buy, and the Ask is the price that sellers are

willing to sell at any given time. Under normal market conditions the dealing spread

would be no more than 5 pips.


Trade in rising or falling markets

With FX Trading you can trade long or short which means you can take a view on any

currency pair and place a relevant trade. If you feel that the UK economy is strong

and the US Dollar will weaken against the Sterling you would execute a BUY GBP/USD

order. By doing so you have bought British pounds in the expectation that they will

appreciate versus the US dollar. If you feel the UK will continue to weaken and this

will hurt the British Pound, you would execute a SELL GBP/USD order. By doing so you

have sold British pounds in the expectation that they will depreciate versus the US

dollar.