Internet World: July 2009

Forex Trading Success - Three Popular Forex Trading Strategies That Lose Money - Avoid Them!

Here we are going to look at three popular Forex trading strategies which the bulk of all new traders use and they are all doomed to failure so make sure you avoid them or you will lose to, here they are.

Let's take a look at all strategies which involve making no effort and buying the vast amount of Forex Robots and Expert Advisors.

1. Automated Predictive Software

How many cheap hundred dollar systems do you see online which tell you they can make you an income for life with no effort, because they have software that predicts the future? There are loads of them, they all lose and there predictions, always turn out as accurate as your horoscope.

You cannot predict markets in advance because humans are not predictable!

People are creatures of emotion and not logical, if you could predict the future there would be no market, as we would all know the price in advance. Avoid these cheap get rich quick systems, you don't win in a market were 95% of traders lose by making no effort and spending the cost of a good night out.

2. Any Forex Scalping or Day Trading Strategy

Any system based on the above will lose long term - think about what you have to to win:

You have to decide what countless millions of traders will do in advance, all with different skills, aims objectives and emotional make up and to make it even harder you have to decide what they will do in a few minutes or hours.

All volatility in short term time frames is random therefore, you cannot get the odds on your side and you can't win. Avoid these short term trading strategies.

3. Fibonacci Systems

This has to be one of the most amusing and dumb ways to trade Forex, this is no disrespect to Fibonacci but even he would be surprised how his theory has been hijacked by the far out investment crowd.

This theory had nothing to do with Forex and traders who trade it, give you mystical retracements you can buy into where prices are supposed to hold to some universal law - so do they work?

Sometimes but so will any percentage retracement. This theory is supposed to have found the hidden order of the universe but it hasn't quite figured it out in Forex! Do not be taken in by people selling you systems, based upon this theory.

If you want to Win at Forex

Get a simple Forex trading strategy, based upon trading the odds which doesn't predict but executes its trades on the reality of price change and you can enjoy long term currency trading success.

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Preferred Forex Trading Hours - Choose The Best Trading Time

Trading is considered to be 24 hours 5 days a week. It starts from 23.00 (EST) Sunday and closes at 24.00 (EST) Friday (trading server time). The time zone in forex trading is referenced in terms of Eastern Standard Time (EST).

Currency trading involves global exchange of currencies all around the world. When forex trading stops in one part of the globe, it opens in another part.

Here trading time does not follow the same time as is the case in other trading markets like the stocks and commodities. If one part of the world goes to sleep, the other part awakens.

When forex trading activity closes with the onset of darkness in one part of the world, it starts in other places with the onset of daylight. Thus, when there is night in Tokyo and Fx trading stops, it is daylight in London and forex activity starts. When London moves towards closure, trading in New York comes to life.

Along with the closing and opening of different forex markets at different times, volume of forex trading also changes. There is a brief lull in trading at certain times while other times are quite brisk.

Major centers of forex market are Wellington, New Zealand, Sydney, Tokyo, Hong Kong, Singapore, Moscow, Frankfort, London and New York. For time zones, we mostly concentrate on Japan, London and New York.

Why trade forex?

Superior liquidity: with almost $2 trillion traded each day, it's the world's largest and most liquid market.
24-Hour trading activity(from Sunday 5 pm EST to Friday 4:30 pm EST): no susceptibility to "after hours" reports.
Increased buying power: using leverage (200:1 for most brokers) allows for huge profits.
Lower transaction costs.
With the rise of the Internet, the forex market is no longer the exclusive domain of large financial institutions and hedge funds. The market is now mostly made of private retail traders.

To take advantage of these benefits, forex investors - whether they are novices or more seasoned - trade with Finotec.

Why such an education is important?

The main appeal of forex trading is that it can become a very lucrative source of profit. There is, however, a downside: it can also lead to substantial losses. Unfortunately, traders who rush into deals without a solid training – and they are numerous – are bound to burn. So why learn the hard way? With Finotec's online forex courses, you acquire all the skills that make a successful trader. Forex learning was never so easy!

Main topics addressed in our forex courses

Forex market introduction: Learn the particularities of the foreign exchange market and how forex fits in the greater world of finance.
Trading strategies and tools: See how you can combine different trades and what trading tools you may use.
Types of deals: Find out about various forex market orders.
Fundamental and Technical Analysis: Interpreting graphs and economic data to make market predictions.
The Fibonacci correction: One of traders’ favorite technical indicators for identifying and predicting market trends.
Guide to online trading: How to start trading over the Internet.
Trading psychology: Adrenaline, impulses, and trading profiles – what kind of trader are you?
Money and Risk Management methods: One of the main aspects of speculation consists in increasing your chances for profit while reducing your chances for loss. Find out how.
What makes a champion trader: The do’s and don’ts of online trading.

Finotec Forex Training Program

Finotec, in cooperation with E-market online, a leading online forex learning center, presents a series of online forex courses designed to guide beginners through the competitive world of Forex trading. This comprehensive, step-by-step approach to foreign exchange provides students with in-depth information, proper training, and useful resources - all the tools necessary for profitable trading.

With Finotec, forex learning comes together with practicing: as students learn more about forex, they will be invited to put their knowledge into practice and put their skills to the test – all with no risk of course. Indeed, there is no better way to enter the forex market than through the Finotec Demo Platform. As you absorb the information you will have learned, we will teach you how to trade and how to invest smartly on the FX market, in real market conditions. From the basics of forex to advanced trade orders and trading strategies, our learning programs will teach you the skills that make a good trader.

Finotec Trading Conditions

When buying or selling forex, CFDs on indices or stocks, and commodities with Finotec, you enjoy very competitive trading conditions: high leverage, low spreads, and first-rate service. Click on the instrument menu you wish to trade to view the list of products and their associated leverage currently offered in each category. Please note that margin options and spreads vary according to the product you choose.

Forex Trading Condition:

With Finotec, you enjoy unparalleled forex trading conditions: Choose among a wide range of currency pairs and trade on narrow spreads on majors and many cross currencies. Whether you are an individual or an institutional trader, Finotec offers great trading conditions to suit your needs.

24hr Forex Trading – Forex Trading Hours

Open a forex account and enjoy a 24hr Forex Trading experience. Currencies are traded 24 hours a day, from Sunday afternoon EST* (Eastern Standard Time) to Friday afternoon EST. Through this 5+ day week of market activity, there is always at least one financial center open for business. Indeed, as some markets close for the night, others open somewhere else on the planet. Since forex trading hours overlap, currencies are being traded continuously. In other words, forex practically never stops.

Traders new to the world of foreign exchange tend to think that since the market is open 24 hours a day, they may trade whenever they choose during the day. Although this preconceived idea is actually true, it needs to be clarified. Indeed when it comes to forex trading hours, some hours present better opportunities than others. By better opportunities, we mean of course potentially greater profit. So what are the most suitable forex trading hours and why?

Usually, the best time to enter forex markets is when large volumes of currencies are traded. At those hours, traders can take full advantage of forex benefits. Since the forex market is traded 24 hours a day, the best time to enter is when several countries are trading at the same time. In each time zone across the world, forex markets operate from 8 am to 4 pm. So, to take advantage of heavy trading volume, the best is to look at when forex market hours in different countries overlap. Those hours are usually the time when the forex market is the most active and has thus the largest volume of trades and the biggest pip movements. It is when currencies are the most active that traders have a better chance of making some profit. Slow markets offer little chances of profit and therefore, forex traders usually stay out of them. When do forex trading times overlap?

Worldwide Forex Trading Hours:

Forex Trading opens in New Zealand, followed by Australia, Asia (and particularly Japan), the Middle East, Europe (with London being the main financial center) and America.

Forex Trading Hours (EST):

Australia: 5pm - 1 am
Tokyo: 7 pm - 3 am
Singapore/Hong Kong: 9 pm - 5 am
Frankfurt: 2 am - 10 am
London: 3 am - 11 am

We can see that at around 5 am, trading stops in Asia while in Europe, the market is at its busiest time.

On the other side of the Atlantic, trading in the USA kicks off in New York at 8 am while the European market is coming to a close. Afterwards, the Australian is waking up again in Sidney completing one full trading day.

To see when markets overlap, let's have a look at the different forex trading times in each main financial center across the globe. (Times are displayed according to EST) So here are the times when two trading sessions overlap:

New York and London: from 8 am to 12 am (EST)
Sydney and Tokyo: from 7 pm to 2 am
London and Tokyo markets overlap one hour, from 3 am to 4 am.

What does this mean? Trading EUR/USD, GBP/USD, or USD/CHF between 8 am and 12 am (EST) can lead to good results since markets for those currencies (European and American) are both active at the same time. This is when the largest volume of trades occurs, creating a greater chance of making significant profit in the forex market.

Another good time to trade is from 1 am to 3 am EST. As you can see in the table above, at that time, European markets are waking up while Asian markets are closing, offering good trade opportunities. The same goes for the 7 pm to 10 pm EST time period, when the Asian and Australian markets overlap.

Speculation

Controversy about currency and their effect on currency devaluations and national economies recurs regularly. Nevertheless, economists including have argued that speculators ultimately are a stabilizing influence on the market and perform the important function of providing a market for transferring risk from those people who don't wish to bear it, to those who do. Other economists such as this argument to be based more on politics and a free market philosophy than on economics.

Large and other well capitalized "position traders" are the main professional speculators. According to some economists, individual traders could act as "noise traders" and have a more destabilizing role than larger and better informed actors .

Currency speculation is considered a highly suspect activity in many countries. While investment in traditional financial instruments like bonds or stocks often is considered to contribute positively to economic growth by providing capital, currency speculation does not; according to this view, it is simply that often interferes with economic policy. For example, in 1992, currency speculation forced the to raise interest rates for a few days to 500% per annum, and later to devalue the krona. Malaysian Prime Minister one well known proponent of this view. He blamed the devaluation of the in 1997 on and other speculators.

reports on an opposing view, comparing speculators to "vigilantes" who simply help "enforce" international agreements and anticipate the effects of basic economic "laws" in order to profit.

In this view, countries may develop unsustainable financial or otherwise mishandle their national economies, and foreign exchange speculators allegedly made the inevitable collapse happen sooner. A relatively quick collapse might even be preferable to continued economic mishandling. Mahathir Mohamad and other critics of speculation are viewed as trying to deflect the blame from themselves for having caused the unsustainable economic conditions. Given that Malaysia recovered quickly after imposing currency controls directly against IMF advice, this view is open to doubt.

Financial instruments

A transaction is a two-day delivery transaction (except in the case of trades between the US Dollar, Canadian Dollar, Turkish Lira and Russian Ruble, which settle the next business day), as opposed to the , which are usually three months. This trade represents a “direct exchange” between two currencies, has the shortest time frame, involves cash rather than a contract; and interest is not included in the agreed-upon transaction. The data for this study come from the . Spot transactions has the second largest turnover by after Swap transactions among all FX transactions in the Global FX market. NNM

Forward

Future

Foreign currency futures are exchange traded forward transactions with standard contract sizes and maturity dates — for example, $1000 for next November at an agreed rate Futures are standardized and are usually traded on an exchange created for this purpose. The average contract length is roughly 3 months. Futures contracts are usually inclusive of any interest amounts.

Main article:

The most common type of forward transaction is the . In a swap, two parties exchange currencies for a certain length of time and agree to reverse the transaction at a later date. These are not standardized contracts and are not traded through an exchange.

Option

Main article:

A foreign exchange option (commonly shortened to just FX option) is a derivative where the owner has the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date. The FX options market is the deepest, largest and most liquid market for options of any kind in the world.

Exchange-Traded Fund

Main article:

Exchange-traded funds (or ETFs) are open ended investment companies that can be traded at any time throughout the course of the day. Typically, ETFs try to replicate a such as the (e.g., SPY), but recently they are now replicating investments in the currency markets with the ETF increasing in value when the US Dollar weakens versus a specific currency, such as the Euro. Certain of these funds track the price movements of world currencies versus the US Dollar, and increase in value directly counter to the US Dollar, allowing for speculation in the US Dollar for US and US Dollar denominated investors and speculators.

Algorithmic trading in foreign exchange

Growing in the FX market, and is becoming much more common. According to financial consultancy Celent estimates, by 2008 up to 25% of all trades by volume will be executed using algorithm, up from about 18% in 2005.

An algorithmic trader needs to be mindful of potential fraud by the broker. Part of the weekly algorithm should include a check to see if the amount of transaction errors when the trader is losing money occurs in the same proportion as when the trader would have made money.

Market psychology

investors and trader perceptions influence the foreign exchange market in a variety of ways:

Flights to quality: Unsettling international events can lead to a with investors seeking . There will be a greater demand, thus a higher price, for currencies perceived as stronger over their relatively weaker counterparts. The has been a traditional safe haven during times of political or economic uncertainty.
Long-term trends: Currency markets often move in visible long-term . Although currencies do not have an annual growing season like physical commodities, do make themselves felt. Cycle analysis looks at longer-term price trends that may rise from economic or political trends.
"Buy the rumor, sell the fact": This market truism can apply to many currency situations. It is the tendency for the price of a currency to reflect the impact of a particular action before it occurs and, when the anticipated event comes to pass, react in exactly the opposite direction. This may also be referred to as a market being "oversold" or "overbought". To buy the rumor or sell the fact can also be an example of the known as , when investors focus too much on the relevance of outside events to currency prices.
Economic numbers: While can certainly reflect economic policy, some reports and numbers take on a talisman-like effect: the number itself becomes important to market psychology and may have an immediate impact on short-term market moves. "What to watch" can change over time. In recent years, for example, figures and numbers have all taken turns in the spotlight.
: As in other markets, the accumulated price movements in a currency pair such as EUR/USD can form apparent patterns that traders may attempt to use. Many traders study price charts in order to identify such patterns.

Political conditions

Internal, regional, and international conditions and events can have a profound effect on currency markets.

All exchange rates are susceptible to political instability and anticipations about the new ruling party. Political upheaval and instability can have a negative impact on a nation's economy. For example, destabilization of coalition governments in India, Pakistan and Thailand can negatively affect the value of their currencies. Similarly, in a country experiencing financial difficulties, the rise of a political faction that is perceived to be fiscally responsible can have the opposite effect. Also, events in one country in a region may spur positive or negative interest in a neighboring country and, in the process, affect its currency.

Economic factors

These include: (a)economic policy, disseminated by government agencies and (b)economic conditions, generally revealed through economic reports, and other .

Economic policy comprises government (budget/spending practices) and (the means by which a government's central bank influences the supply and "cost" of money, which is reflected by the level of rates).
Economic conditions include:
Government budget deficits or surpluses
The market usually reacts negatively to widening government , and positively to narrowing budget deficits. The impact is reflected in the value of a country's currency.
Balance of trade levels and trends
The trade flow between countries illustrates the demand for goods and services, which in turn indicates demand for a country's currency to conduct trade. Surpluses and deficits in trade of goods and services reflect the competitiveness of a nation's economy. For example, may have a negative impact on a nation's currency.
Inflation levels and trends
Typically a currency will lose value if there is a high level of in the country or if inflation levels are perceived to be rising [. This is because inflation erodes , thus demand, for that particular currency. However, a currency may sometimes strengthen when inflation rises because of expectations that the central bank will raise short-term interest rates to combat rising inflation.
Economic growth and health
Reports such as GDP, levels, and others, detail the levels of a country's and health. Generally, the more healthy and robust a country's economy, the better its currency will perform, and the more demand for it there will be.
Productivity of an economy
Increasing productivity in an economy should positively influence the value of its currency. It affects are more prominent if the increase is in the traded sector

Determinants of FX Rates

The following theories explain the fluctuations in FX rates in a regime (In a FX rates are decided by its government):

(a) International parity conditions viz; . Though to some extent the above theories provide logical explanation for the fluctuations in exchange rates, yet these theories falter as they are based on challengeable assumptions [e.g., free flow of goods, services and capital] which seldom hold true in the real world.

(b) Balance of payments model This model, however, focuses largely on tradable goods and services, ignoring the increasing role of global capital flows. It failed to provide any explanation for continuous appreciation of dollar during 1980s and most part of 1990s in face of soaring US current account deficit.

(c) Asset market model views currencies as an important asset class for constructing investment portfolios. Assets prices are influenced mostly by people’s willingness to hold the existing quantities of assets, which in turn depends on their expectations on the future worth of these assets. The asset market model of exchange rate determination states that “the exchange rate between two currencies represents the price that just balances the relative supplies of, and demand for, assets denominated in those currencies.”

None of the models developed so far succeed to explain FX rates levels and volatility in the longer time frames. For shorter time frames (less than a few days) can be devised to predict prices. Large and small institutions and professional individual traders have made consistent profits from it. It is understood from above models that many macroeconomic factors affect the exchange rates and in the end currency prices are a result of dual forces of demand and supply. The world's currency markets can be viewed as a huge melting pot: in a large and ever-changing mix of current events, factors are constantly shifting, and the price of one currency in relation to another shifts accordingly. No other market encompasses (and distills) as much of what is going on in the world at any given time as foreign exchange.

Supply and demand for any given currency, and thus its value, are not influenced by any single element, but rather by several. These elements generally fall into three categories: factors.

Trading characteristics

**Most traded currencies**
Currency distribution of reported FX market turnover
Rank	Currency	ISO 4217 code (Symbol)	% daily share (April 2007)
1	United States dollar	USD ($)	86.3%
2	Euro	EUR (€)	37.0%
3	Japanese yen	JPY (¥)	17.0%
4	Pound sterling	GBP (£)	15.0%
5	Swiss franc	CHF (Fr)	6.8%
6	Australian dollar	AUD ($)	6.7%
7	Canadian dollar	CAD ($)	4.2%
8-9	Swedish krona	SEK (kr)	2.8%
8-9	Hong Kong dollar	HKD ($)	2.8%
10	Norwegian krone	NOK (kr)	2.2%
11	New Zealand dollar	NZD ($)	1.9%
12	Mexican peso	MXN ($)	1.3%
13	Singapore dollar	SGD ($)	1.2%
14	South Korean won	KRW (₩)	1.1%
Other			14.5%
Total			200% There is no unified or centrally cleared market for the majority of FX trades, and there is very little cross-border regulation. Due to the nature of currency markets, there are rather a number of interconnected marketplaces, where different currencies traded. This implies that there is not a single exchange rate but rather a number of different rates (prices), depending on what bank or market maker is trading, and where it is. In practice the rates are often very close, otherwise they could be exploited by instantaneously. Due to London's dominance in the market, a particular currency's quoted price is usually the London market price. A joint venture of the and , called opened in 2007 and aspired but failed to the role of a central market mechanism. The main trading center are all important centers as well. Banks throughout the world participate. Currency trading happens continuously throughout the day; as the Asian trading session ends, the European session begins, followed by the North American session and then back to the Asian session, excluding weekends. Fluctuations in are usually caused by actual monetary flows as well as by expectations of changes in monetary flows caused by changes in (GDP) growth, inflation ( theory), interest rates ( budget and or surpluses, large cross-border deals and other macroeconomic conditions. Major news is released publicly, often on scheduled dates, so many people have access to the same news at the same time. However, the large banks have an important advantage; they can see their customers' Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the of the currency into which the price of one unit of XXX is expressed . For instance, EUR/USD is the price of the expressed in , as in 1 euro = 1.5465 dollar. Out of convention, the first currency in the pair, the base currency, was the stronger currency at the creation of the pair. The second currency, counter currency, was the weaker currency at the creation of the pair. The factors affecting XXX will affect both XXX/YYY and XXX/ZZZ. This causes positive currency between XXX/YYY and XXX/ZZZ. On the , according to the BIS study, the most heavily traded products were: EUR/USD: 27% USD/JPY: 13% GBP/USD (: 12% and the US currency was involved in 86.3% of transactions, followed by the euro (37.0%), the yen (17.0%), and sterling (15.0%) ( Note that volume percentages should add up to 200%: 100% for all the sellers and 100% for all the buyers. Trading in the euro has grown considerably since the currency's creation in January 1999, and how long the foreign exchange market will remain dollar-centered is open to debate. Until recently, trading the euro versus a non-European currency ZZZ would have usually involved two trades: EUR/USD and USD/ZZZ. The exception to this is EUR/JPY, which is an established traded currency pair in the interbank spot market. As the dollar's value has eroded during 2008, interest in using the euro as reference currency for prices in commodities (such as oil), as well as a larger component of foreign reserves by banks, has increased dramatically. Transactions in the currencies of commodity-producing countries, such as AUD, NZD, CAD, have also increased.

Money Transfer/Remittance Companies

Remittance companies perform high-volume low-value transfers generally by economic migrants back to their home country. In 2007, the estimated that there were $369 billion of remittances (an increase of 8% on the previous year). The four largest markets (India, China, Mexico and the Philippines) receive $95 billion. The largest and best known provider is Western Union with 345,000 agents globally.

Non-bank Foreign Exchange Companies

Non-bank foreign exchange companies offer currency exchange and international payments to private individuals and companies. These are also known as foreign exchange brokers but are distinct in that they do not offer speculative trading but currency exchange with payments. I.e., there is usually a physical delivery of currency to a bank account.

It is estimated that in the UK, 14% of currency transfers/ are made via Foreign Exchange Companies. companies' selling point is usually that they will offer better exchange rates or cheaper payments than the customer's bank. These companies differ from Money Transfer/Remittance Companies in that they generally offer higher-value services.

Retail foreign exchange brokers

There are two types of retail brokers offering the opportunity for speculative trading: . Retail traders (individuals) are a small fraction of this market and may only participate indirectly through banks. Retail brokers, while largely controlled and regulated by the might be subject to At present, the NFA and CFTC are imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller, and perhaps questionable brokers are now gone. It is not widely understood that retail brokers and market makers typically trade against their clients and frequently take the other side of their trades. This can often create a potential conflict of interest and give rise to some of the unpleasant experiences some traders have had. A move toward NDD (No Dealing Desk) and STP has helped to resolve some of these concerns and restore trader confidence, but caution is still advised in ensuring that all is as it is presented.

Investment management firms

Investment management firms (who typically manage large accounts on behalf of customers such as pension funds and endowments) use the foreign exchange market to facilitate transactions in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.

Some investment management firms also have more speculative specialist operations, which manage clients' currency exposures with the aim of generating profits as well as limiting risk. Whilst the number of this type of specialist firms is quite small, many have a large value of assets under management (AUM), and hence can generate large trades.

Hedge funds as speculators

About 70% to 90% of the foreign exchange transactions are speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency. have gained a reputation for aggressive currency speculation since 1996. They control billions of dollars of and may borrow billions more, and thus may overwhelm intervention by central banks to support almost any currency, if the economic fundamentals are in the hedge funds' favor.

Central banks

National central banks play an important role in the foreign exchange markets. They try to control the , inflation, and/or interest rates and often have official or unofficial target rates for their currencies. They can use their often substantial foreign exchange reserves to stabilize the market. argued that the best stabilization strategy would be for central banks to buy when the exchange rate is too low, and to sell when the rate is too high—that is, to trade for a profit based on their more precise information. Nevertheless, the effectiveness of central bank "stabilizing speculation" is doubtful because central banks do not go bankrupt if they make large losses, like other traders would, and there is no convincing evidence that they do make a profit trading.

The mere expectation or rumor of central bank might be enough to stabilize a currency, but aggressive intervention might be used several times each year in countries with a currency regime. Central banks do not always achieve their objectives. The combined resources of the market can easily overwhelm any central bank. scenarios of this nature were seen in the 1992–93 collapse, and in more recent times in Southeast Asia.

Commercial companies

An important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators, and their trades often have little short term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when very large positions are covered due to exposures that are not widely known by other market participants.

Banks

The interbank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account. Until recently, foreign exchange brokers did large amounts of business, facilitating interbank trading and matching anonymous counterparts for small fees. Today, however, much of this business has moved on to more efficient electronic systems. The lets traders listen in on ongoing interbank trading and is heard in most , but turnover is noticeably smaller than just a few years ago.

Market participants

Unlike a stock market, where all participants have access to the same prices, the foreign exchange market is divided into levels of access. At the top is the inter-bank market, which is made up of the largest investment banking firms. Within the inter-bank market, spreads, which are the difference between the bid and ask prices, are razor sharp and usually unavailable, and not known to players outside the inner circle. The difference between the bid and ask prices widens (from 0-1 to 1-2 pips for some currencies such as the EUR). This is due to volume. If a trader can guarantee large numbers of transactions for large amounts, they can demand a smaller difference between the bid and ask price, which is referred to as a better spread. The levels of access that make up the foreign exchange market are determined by the size of the "line" (the amount of money with which they are trading). The for 53% of all transactions. After that there are usually smaller investment banks, followed by large multi-national corporations (which need to hedge risk and pay employees in different countries), large hedge funds, and even some of the retail FX-metal market makers. According to Galati and Melvin, “Pension funds, insurance companies, mutual funds, and other institutional investors have played an increasingly important role in financial markets in general, and in FX markets in particular, since the early 2000s.” (2004) In addition, he notes, “Hedge funds have grown markedly over the 2001–2004 period in terms of both number and overall size” Central banks also participate in the foreign exchange market to align currencies to their economic needs.

Market size and liquidity

The foreign exchange market is unique because of

its trading volumes,
the extreme the market,
its geographical dispersion,
its long trading hours: 24 hours a day except on weekends (from 22:00 on Sunday until 22:00 UTC Friday),
the variety of factors that affect .
the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)
the use of

Main foreign exchange market turnover, 1988 - 2007, measured in billions of USD.

As such, it has been referred to as the market closest to the ideal , notwithstanding by . According to the average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. Trading in the world's main financial markets accounted for $3.21 trillion of this. This approximately $3.21 trillion in main foreign exchange market turnover was broken down as follows:

$1.005 trillion in transactions
$362 billion in
$1.714 trillion in
$129 billion estimated gaps in reporting

Of the $3.98 trillion daily global turnover, trading in accounted for around $1.36 trillion, or 34.1% of the total, making London by far the global center for foreign exchange. In second and third places respectively, trading in New York accounted for 16.6%, and Tokyo accounted for 6.0%. In addition to "traditional" turnover, $2.1 trillion was traded in

Exchange-traded FX were introduced in 1972 at the and are actively traded relative to most other futures contracts.

Several other developed countries also permit the trading of FX derivative products (like currency futures and options on currency futures) on their exchanges. All these developed countries already have fully convertible capital accounts. Most emerging countries do not permit FX derivative products on their exchanges in view of prevalent controls on the capital accounts. However, a few select emerging countries (e.g., Korea, South Africa, India—) have already successfully experimented with the currency futures exchanges, despite having some controls on the capital account.

FX futures volume has grown rapidly in recent years, and accounts for about 7% of the total foreign exchange market volume, according to The (5/5/06, p. 20).

**Top 10 currency traders**
% of overall volume, May 2008
Rank	Name	Volume
1	Deutsche Bank	21.70%
2	UBS AG	15.80%
3	Barclays Capital	9.12%
4	Citi	7.49%
5	Royal Bank of Scotland	7.30%
6	JPMorgan	4.19%
7	HSBC	4.10%
8	Lehman Brothers	3.58%
9	Goldman Sachs	3.47%
10	Morgan Stanley	2.86%

Foreign exchange trading increased by 38% between April 2005 and April 2006 and has more than doubled since 2001. This is largely due to the growing importance of foreign exchange as an asset class and an increase in fund management assets, particularly of hedge funds and pension funds. The diverse selection of execution venues have made it easier for retail traders to trade in the foreign exchange market. In 2006, retail traders constituted over 2% of the whole FX market volumes with an average daily trade volume of over 50-60 billion Because foreign exchange is an market where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house. The biggest geographic trading centre is the UK, primarily London, which according to estimates has increased its share of global turnover in traditional transactions from 31.3% in April 2004 to 34.1% in April 2007. The ten most active traders account for almost 80% of trading volume, according to the 2008 Euromoney FX survey. These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The the difference between the price at which a bank or will sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually 0–3 . For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203 on a retail broker. Minimum trading size for most deals is usually 100,000 units of , which is a standard "lot".

These spreads might not apply to retail customers at banks, which will routinely mark up the difference to say 1.2100/1.2300 for transfers, or say 1.2000/1.2400 for banknotes or travelers' checks. Spot prices at market makers vary, but on EUR/USD are usually no more than 3 pips wide (i.e., 0.0003). Competition is greatly increased with larger transactions, and pip spreads shrink on the major pairs to as little as 1 to 2 pips.

Foreign exchange market

The foreign exchange market (currency, forex, or FX) is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile which remained as per the until 1971.

Presently, the FX market is one of the largest and most financial markets in the world, and includes trading between large banks, currency , corporations, and other . The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over 3.2 trillion in April 2007 by the Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.

The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollars, Euros, Japanese yen, Pounds Sterling, etc., and the need for trading in such currencies.

Marketing Online Benefit #3 - You can target specific demographics in your advertising

Marketing online allows you to target specific demographics such as gender, age and location. You can even target specific income levels, education levels and occupation. You can do this in traditional marketing, but it's not as easy and is often a guessing game.

Marketing Online Benefit #2 - You can track real-time results

Marketing online allows you to track real-time results using online analytics to make a determination on how your marketing campaign is performing. There are ways to track traditional marketing efforts, but most the time it cannot be done in real-time. This can mean success or failure to your campaign.

Marketing Online Benefit #1 - You can make changes on the fly.

One benefit of marketing online versus offline marketing such as placing traditional advertisements in magazines, newspapers or on television is that you can change them on the fly. By monitoring and tracking how your advertisements and marketing efforts are doing you can make the decision to change a graphic or wording and do it without any problems. This is not the case with traditional marketing and advertising.

Explore the Benefits of Marketing Online

Marketing online is stretching marketing budgets for many companies. We are all looking for ways to marketing more efficiently and effectively along with saving as many dollars as possible. The solution? Evaluating marketing online. Marketing your business online brings with it many benefits that are not available with traditional and offline marketing.

Marketing Online - Men and Women Use the Internet Differently - I

When we review studies that have been done on the different ways that men and women use the internet, we can gain a greater deal of knowledge on how to position our products online.

Let's take a look at what a past study done by Pew Internet and American Life showed, while this study was done in 2005 I still believe much of the knowledge is applicable and can be used today.

Men are more likely to use the internet to:

Read the news
Buy travel services or make reservations
Check sports scores and gather sports information
Stay updated on political news
Participate in online auctions, such as ebay
Write content to publish online
Download music
Buy and sell stocks, bonds and mutual funds

A Forrester study done in 2007 also showed that on the average men tend to stay online longer and devote more time to online entertainment and researching technical gadgets.

Women use the internet to:

Get health information
Read spiritual and religious information
Gain access and participate in support group websites

A few other interesting statistics that were provided in a different study done by Burst Media in the beginning of 2009 stated the following:

62.3% of women use the internet as their primary source for information on the products they were considering purchasing.
51.7% of the women studied use the internet as the primary way to keep in touch with their families

As you can see men go online to be entertained and hunt down information, where women tend to go online to gather information that assists them in nurturing, themselves and those around them. Clearly while both men and women generally spend allotments of time online, gender stereotypes are prevalent in what they do with their time online.

Marketing Online - Men and Women Use the Internet Differently - I

When we review studies that have been done on the different ways that men and women use the internet, we can gain a greater deal of knowledge on how to position our products online.

Let's take a look at what a past study done by Pew Internet and American Life showed, while this study was done in 2005 I still believe much of the knowledge is applicable and can be used today.

Men are more likely to use the internet to:

Read the news
Buy travel services or make reservations
Check sports scores and gather sports information
Stay updated on political news
Participate in online auctions, such as ebay
Write content to publish online
Download music
Buy and sell stocks, bonds and mutual funds

A Forrester study done in 2007 also showed that on the average men tend to stay online longer and devote more time to online entertainment and researching technical gadgets.

Women use the internet to:

Get health information
Read spiritual and religious information
Gain access and participate in support group websites

A few other interesting statistics that were provided in a different study done by Burst Media in the beginning of 2009 stated the following:

62.3% of women use the internet as their primary source for information on the products they were considering purchasing.
51.7% of the women studied use the internet as the primary way to keep in touch with their families

Marketing Online - Men and Women Use the Internet Differently

When it comes to marketing online, you must understand your consumers. This means learning what they look for, and how they use the internet. This can help you grab their attention and get your marketing message in front of the right audience.

It's also important to realize that when it comes to online habits of men and women - they differ. I know, surprise! In the past there has been a lag with women when it came to the adoption of the internet, that is no longer the case. Truth is, studies show that women under the age of 65 are quicker to use the internet than men. As women we love to use the internet for research, where men prefer to use it as an entertainment tool. Do you see how this information can help?

Internet Marketing Strategy

Explore strategies and techniques that you can use on the Internet that will enhance and support your business's overall marketing objectives. Learn how to conduct banner promotions, generate targeted online traffic, positioning your content, and over all brand awareness.

Internet World introduces Agency Day in 2009!

For Immediate Release

Internet World introduces Agency Day in 2009!

London, 26th March 2009. With the soaring success of Internet World in previous years and an increase in agency visitor attendance at the show, it only makes sense to introduce a dedicated Agency Day in 2009.

Wednesday is Agency Day at Internet World and offers special content for the agency community. Professionals are invited to visit the show with their colleagues to take advantage of specialised educational topics and events on the day.

The expanded 400 seat keynote theatre will be transformed into an agency only experience, featuring exciting case studies, best practice, and the latest trends and concepts. Agency professionals will have the chance to hear from top level speakers from LOVEFILM, Ogilvy, Kantar Group - WPP, B&Q, and i-level, all on the one day.

Agency visitors are also invited to meet with like-minded industry professionals at the ‘Agency ‘Tweet Up’, put a face to a name or get an insider’s perspective at the ‘Tweet Up’ spot at 11am, located at the networking bar, sponsored by Protx.

Throughout the day, the 6 themed seminar theatres will also showcase featured topics affecting agencies today. Including seminars covering online advertising, PPC, mobile advertising, search behavioural targeting and many more. Exciting speakers include, Dara Brady Head of Advertising at Ryanair presenting in the Digital Marketing theatre and a Panel Debate by the Future of Social Media Panel in the Web 2.0 and social Media theatre.

To wrap up the day, an exclusive after party for all Agency Day Internet World Visitors will be held for professionals to mingle with agency peers, and meet with the digital gurus.

Agency Day is proudly sponsored by Adconian, the largest independent global audience and content network. Register for Agency Day on 29th April at Internet World on the Internet World website.

- END -

Notes to Editor:

For more information on Agency Day visit http://www.internetworld.co.uk/visiting/agency-day

To register for Press Pass to Internet World 2009 visit www.internetworld.co.uk/press

For further information on Internet World 2009 visit www.internetworld.co.uk

Internet World

Internet World is Europe’s longest running, best and largest event for digital marketing and online business, attracting over 13,000 visitors and more than 300 exhibitors.

Now in its 17th year, it is the only event that delivers everything to formulate and implement an online strategy, from digital marketing to ecommerce, content management to hosting. It showcases the UK’s leading suppliers and delivers Europe’s best free education programme.

Photography
A selection of photographs from Internet World 2008 is available. If you require any images to support this release please email lupe.prada@ubm.com.

About UBM Live
UBM Live, formerly CMP Information, provides leading integrated media solutions across 30 different markets. Operating predominantly in the UK, its events, publications, awards and websites offer professionals in Interiors, Security, Licensed Travel, Travel & Venues, Customer Management, Safety & Health and Facilities the ultimate event or media platform to bring buyers and sellers together.

Its leading brands include Technology For Marketing & Advertising, Call Centre Expo, Internet World, Interiors Birmingham – the 2nd largest exhibition in the UK, The National Business Awards, TTG and ATC.

Live has 40 exhibitions, 12 publications and over 15 digital products and awards shows. Each year 250,000 marketers attend its shows, over 100,000 professionals receive UBM Live publications, while each month its website generate over 1 million page impressions. UBM Live has recently extended its leading brands into Abu Dhabi and India.

Press Contact: Lupe Prada, Tel: +44 (0)20 7921 8522, email: lupe.prada@ubm.com

Twitter Panel Debate exclusively at Internet World

London, 15th April 2009

Twitter Panel Debate exclusively at Internet World

Internet World, taking place in just 2 weeks at London’s Earls Court 2, is hosting the UK’s first ever Twitter panel debate.

Wednesday 29th April at 11am in the Keynote Theatre is where a panel of leading industry figures and global brands who have led the way in the social media revolution will share their experiences with the 13,000 expected Internet World visitors.

Panellists include:

Gareth Jones, editor, Revolution
- follow Gareth on Twitter @GJ

Ashley Friedlein, CEO, Econsultancy
- follow Ashley on Twitter @AshleyFriedlein
- follow Econsultancy on Twitter @Econsultancy

Kai Turner, Head of Information Architecture, agency.com
- follow Kai on Twitter @kaigani
- follow agency.com Twitter @agency_com

Guy Stephens, Knowledge & Online Help Manager, Carphone Warehouse
- follow Guy on Twitter @guy1067
- follow Carphone Warehouse on @carphoneware

The panel will address the following key issues:

› How to start using Twitter and how to understand the benefits for your organisation

› How to write relevant and powerful tweets, the do’s and don’ts, and how to monitor and react to the activity around your brand

› Tips and case-study-examples of successful campaigns, how to build followers, who to follow, applications to manage your campaigns, and how to resource effectively

The panel will be of interest and relevance to both beginners wondering how Twitter can add value to their online marketing campaigns, and experienced users looking to embed Twitter into their web 2.0 digital strategy.

To attend this and all other keynote sessions, visitors must online for free entry.

Press are invited to register for a free press pass at:
http://www.internetworld.co.uk/press

Session updates on Twitter - search for #TDIW
Follow Internet World - @iw_expo

- ENDS –

Notes to Editor:
To register for Press Pass to Internet World 2009 visit www.internetworld.co.uk/press
For further information on Internet World 2009 visit www.internetworld.co.uk

Internet World
Internet World is Europe’s longest running, best and largest event for digital marketing and online business, attracting over 13,000 visitors and more than 300 exhibitors.
Now in its 17th year, it is the only event that delivers everything to formulate and implement an online strategy, from digital marketing to ecommerce, content management to hosting. It showcases the UK’s leading suppliers and delivers Europe’s best free education programme.

Photography
A selection of photographs from Internet World 2008 is available. If you require any images to support this release please email lupe.prada@ubm.com.

Press Contact: Lupe Prada, Tel: +44 (0)20 7921 8522, email: lupe.prada@ubm.com

Internet World exhibition bites back at the recession with a surge in re-bookings and phenomenal visitor growth

Internet World on 28-30 April bucked business trends and defied the recession by delivering a 26% increase in visitor numbers and 80% re-bookings for the 2010 event.

These impressive figures reinforce Internet World’s position as the largest event in Europe for online business and digital marketing solutions, and the premiere exhibition date in the calendar for marketing, agency, digital, media and IT professionals. And what’s more, the stats clearly show that in the current climate, online is where business spend is being focused.

“A great line up at Internet World 2009, really good variety of exhibitors and great networking. I’d definitely recommend it!”

Faith Evans, Head of Site, BT Business

“Really good education sessions on offer at Internet World, and great best practice on display. I would recommend to peers and colleagues.”

Pippa Norris, Head of Digital Communications, British Army

Response from the suppliers who exhibited at the show was overwhelming, with many claiming to have had their best show ever, and visitors queuing round the stands to get into the packed Seminar & Keynote Theatres.

“We’ve been exhibiting at Internet World for years, and we’ve already rebooked for 2010. We have found a really high quality of visitors and our investment in this show has more than been worth it. It’s the perfect audience for us!”

Jonathan Obadia, Managing Director, Serverstream

“There was a high calibre of visitors and we met a lot of influential people, which exceeded our expectations. As an event, Internet World is the most important one for us.”

Imran Pervez, Events Marketing Manager, Rackspace

The free education sessions were extremely popular, demonstrating a thirst for the latest thought-leadership and case-study success stories from big brands including National Express, Orange, seatwave.com, British Red Cross, MSN, Barclaycard, The Daily Mirror, Alzheimer’s Society and more.

15,000 seats were filled during the 3 day seminar programme which comprised 6 themed seminar theatres covering mobile, online advertising, search & affiliate marketing; ecommerce; web 2.0, social media, usability, design & build; email, mobile marketing & analytics; and enterprise 2.0 & content management.

A further 7,000 attended the 20-strong Keynote Programme which included leading industry figures and online business pioneers from global brands including: Porsche, Mars Drinks, Disney, John Lewis, Barclays, HMV, The Guardian, Virgin, Ogilvy and many more.

To accommodate demand, all sessions were filmed and will be available online to all attendees.

This year also saw the launch of a number of new features including: the Future of Social Media Pavilion, and the Innovation Pavilion, plus the return of the popular Mobile Experience, and a re-invigorated VIP Scheme and Club Lounge for the most senior-level delegates, sponsored by Weboptimiser.

The showfloor presented a diverse range of digital marketing, ecommerce, hosting and content management solutions from industry leading suppliers in the clearly marked zones: all the essential components for running an online business, migrating a business online or promoting a business online. A record 80% of stand space was rebooked for the 2010 event, with all key stand positions snapped up onsite, unquestionably confirming Internet World’s position as the leading event in Europe for online business and digital marketing solutions.

“The generation of new leads was really excellent this year and we found a really high quality of visitors were attending. Internet World is the biggest and best show for this industry and we’ll be back next year.”

Jane Linton, Business Development Director, Imano

“This has been our third year at Internet World. The visitors here are armed with projects and we’ve had an excellent level of leads. Internet World is an integral part of our annual marketing strategy – on the whole a positive experience.”

Dominik Mills, MD, Auros

Internet World, together with its sister event TFM&A, which also achieved trend-bucking success in February 2009, has given renewed hope to the exhibition industry in these challenging times. The 2010 event takes place Tues 27 – Thurs 29 May at Earls Court 2.

* pending BPA Audit

- ENDS -

Notes to Editor:

Photography
A selection of photographs from Internet World 2009 is available. If you require any images to support this release please email ruth.galpine@ubm.com.

Internet World
Internet World is Europe’s longest running, best and largest event for digital marketing and online business, attracting over 13,000 visitors and more than 300 exhibitors.

About UBM Live
UBM Live, formerly CMP Information, provides leading integrated media solutions across 30 different markets. Operating predominantly in the UK, its events, publications, awards and websites offer professionals in Interiors, Security, Licensed Travel, Travel & Venues, Customer Management, Safety & Health and Facilities the ultimate event or media platform to bring buyers and sellers together.

Its leading brands include Technology For Marketing & Advertising, Call Centre Expo, Internet World, Interiors Birmingham – the 2nd largest exhibition in the UK, The National Business Awards, TTG and ATC.

Internet World

Internet World, Europe's longest running, best attended and biggest event for digital marketing and online business, is now over for 2009.

Mark your diary for next year:

Internet World 2010
27th - 29th April
Earls Court 2

Thank-you to all who attended and contributed to this year's show, making it the most successful Internet World to date. For those visitors who didn't get around to all of their favourite seminar sessions..stay tuned for online videos coming soon.

Hear it first, from the experts...only at Internet World.

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