January 4, 2008, Newsletter Issue #35: Global Forex Trading

Tip of the Week

Global Forex trading works by using information intense models regarding the historical, current, and possible future of the economy based on the strengths of a particular sector or national economy. Individual brokers, global forex trading firms, and banking or financial institutions use the information gathered regarding the economy to make trading decisions. Much of the information comes from financial and government institutions in the same manner that stock trade information comes from the companies the stock is representing. In this manner, the agents and brokers use the information gathered from multiple sources to formulate a global forex trading decision based on the prices quoted by the dealers.

The dealers quote prices based on the predicted and current value per unit of the foreign currency. For example, a quoted price would look like “dollars per unit of yen” if it is between U.S. dollars and the Japanese yen. These dealers are constantly ready to purchase and sell foreign currency through global forex trading. This works almost in the same manner as a standard stock trade. The dealer quotes a bid price they are willing to purchase foreign currency at, and quote a sell price based on their asking quote. So, it would be common to see XX US Dollars bid per unit of yen sold. At this point, the agencies such as the individual trader, financial brokers, and banking institutions make decisions for which currency dealer they will purchase from or sell to based on these bidding quotes.

Global forex trading becomes more interesting when the value of global trading is concerned. The value of the trade is not dictated by the dealer’s quoted price, but instead it is determined by the order flow. In this manner, strong and weak currencies are developed based on the difference of the value between the purchase price and the sold price. This customer order flow is used to convey information, where a positive or negative order flow indicates the value of global forex trading.

About LifeTips

Now one of the top on-line publishers in the world, LifeTips offers tips to millions of monthly visitors. Our mission mission is to make your life smarter, better, faster and wiser. Expert writers earn dough for what they know. And exclusive sponsors in each niche topic help us make-it-all happen.

Exclusive Sponsor

Greetings,

Forex Club is excited to announce a special program. When you open a new trading account we will deposit $100 on it to help you to get started with Forex trading. Since there are no fees to open an account, in essence, this means that you can start actual forex trading without spending a single dollar. Sounds like a pretty good deal, does not it? This is way better than a demo account. You can find out details about this promotion program here: http://www.fxclub.com/incentive

Thank you for your interest and good luck!
Forex Club, New York

Not finding the advice and tips you need on this Forex Tip Site? Request a Tip Now!


Guru Spotlight
Byron White