Future Trading And Forex | Forexgen

In the U.S. exchanges, a foreign exchange futures contract is an agreement between two parties to buy/sell a particular (non-U.S. dollar) currency at a particular price on a particular future date, as specified in a standardized contract common to all participants in that currency futures
exchange. (See Box 6-1 on the evolution of foreign exchange futures.) When entering into a
foreign exchange futures contract, no one is actually buying or selling anything—the participants are agreeing to buy or sell currencies on pre-agreed terms at a specified future date if the contract is allowed to reach maturity, which it rarely does.

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A foreign exchange futures contract is conceptually similar to an outright forward foreign exchange contract, in that both are agreements to buy or sell a certain amount of a certain currency for another at a certain price on a certain date.

However, there are important structural and institutional differences between the two instruments:
w Futures contracts are traded through public “open outcry” in organized, centralized
exchanges that are regulated in the United States by the Commodity Futures Trading Commission. In contrast,forward contracts are traded “over-the counter” in a market that is geographically dispersed, largely self-regulated, and subject to the ordinary laws of commercial contracts and taxation.

w Futures contracts are standardized in terms of the currencies that can be traded, the amounts,
and maturity dates, and they are subject to the trading rules of the exchange with respect to
daily price limits, etc. Forward contracts can be customized to meet particular customer needs.

w Futures contracts are “marked to market” and adjusted daily; there are initial and aintenance
margins and daily cash settlements. Forward contracts do not require any cash payment until
maturity (although a bank writing a forward contract may require collateral). Thus, a futures
contract can be viewed as a portfolio or series of forwards, each covering a day or a longer period
between cash settlements.

w Futures contracts are netted through the clearinghouse of the exchange, which receives
the margin payments and guarantees the performance of both the buyer and the seller in
every contract. Forward contracts are made directly between the two parties, with no
clearinghouse between them.

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Forex Dealing Room | ForexGen

In appearance, the trading rooms of many major dealer institutions are similar in many respects.
All have rows of screens, computers, telephones, dedicated lines to customers and to brokers,
electronic dealing and brokering systems, news services, analytic and informational sources,
and other communications equipment.

ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.

The ForexGen's provided services are all restricted and regulated by the international banking and financial regulatory standards. All our provided activities are supported by creativeness and modernization. Ambitious & motivated employees are working simultaneously to protect the customer's confidentiality. ForexGen is continuously providing the market's most competitive conditions.

All have various traders specializing in individual currencies and cross-currencies, in spot,
forwards, swaps, and options; their specialists in offshore deposit markets and various bond
markets; and their marketing groups. There are funds managers and those responsible for
proprietary transactions using the dealer’s own funds. All have their affiliated “back offices”—
not necessarily located nearby—where separate staffs confirm transactions consummated by
the traders and execute the financial payments and receipts associated with clearance and
settlement. Increasingly, there are “mid-office” personnel, checking on the validity of valuations
used by the traders and other matters of risk management.

ForexGen complies with the trade commissions in the USA, EU and Australia. Being registered by the commercial authorities in 18+ countries, we adhere to the United Nations Commission on International Trade Law (UNCITRAL).

The equipment and the technology are critical and expensive. For a bank with substantial trading activity, which can mean hundreds of individual traders and work stations to equip, a full renovation can cost many, many millions of dollars. And that equipment may not last long—with
technology advancing rapidly, the state of the art gallops ahead, and technology becomes obsolete in a very few years. But in a business so dependent on timing, there is a willingness to pay for something new that promises information that is distributed faster or presented more effectively, as well as for better communications, improved analytical capability, and more reliable systems with better back-up. These costs can represent a significant share of trading revenue.

Each of the market-making institutions uses its facilities in its own way. All will consider it
essential to have the most complete and most current information and the latest technology.But
profits will depend, not just on having it, but on how that information and technology are used.
Each institution will have its own business plan, strategy, approach, and objectives. Institutions
will differ in scale of operations, segments of the market on which they wish to concentrate, target customers, style, and tolerance for risk.

The basic objectives and policy with respect to foreign exchange trading are set by senior management. They must decide which services the foreign exchange trading function will provide and how it will provide those services—often as part of a worldwide operation—in light of the bank’s financial and human resources and its attitude toward risk. The senior management must determine, in short, the bank’s fundamental business strategy—which includes, among
other things, the emphasis to be placed on customer relationships and service vis-a-vis
the bank’s trading for its own account—and how that strategy will deal with changing market conditions and other factors.

The trading rooms are the trenches where the battle is joined, where each trader confronts the
market, customers, competitors,and other players, and where each institution plays out its
fundamental business strategy and sees it succeed or fail.A winning strategy and a sound battle plan are essential, and teamwork—with each trader being aware of the actions of others in the group and of developments in related markets—is of enormous importance to success.

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A foreign exchange (Forex) or currency option contract gives the buyer the right, but not the obligation, to buy (or sell) a specified amount of one currency for another at a specified price on (in some cases, on or before) a specified date.
Options are unique in that the right to execute will be exercised only if it is in the holder’s interest to do so. That differs from a forward contract, in which the parties are obligated to execute the transaction on the maturity date, and it differs from a futures contract, in which the parties are obligated, in principle to transact at maturity, but that obligation easily can be—and normally is—bought out and liquidated before the maturity or delivery date.

ForexGen.com is an online trading service provider supplying a unique and individualized service to Forex traders worldwide. We are dedicated to absolutely provide the best online trading services in the Forex market.

ForexGen provides a unique online trading experience based on our intelligent online Forex trading package, the ForexGen Trading Station, including the best online trading system.

ForexGen serves both private and institutional clients. We have a strong commitment to maintain a long term relationship with our clients.

A call option is the right, but not the obligation, to buy the underlying currency, and a put option is the right, but not the obligation, to sell the underlying currency.All currency option trades involve two sides—the purchase of one currency and the sale of another—so that a put to sell pounds sterling for dollars at a certain price is also a call to buy dollars for pounds sterling at that price. The purchased currency is the call side of the trade, and the sold currency is the put side of the trade.

The party who purchases the option is the holder or buyer, and the party who creates the option is the seller or writer. The price at which the underlying currency may be bought or sold is the exercise, or strike, price. The option premium is the price of the option that the buyer pays to the writer. In exchange for paying the option premium up front, the buyer gains insurance against adverse movements in the underlying spot exchange rate while retaining the opportunity to benefit from favorable movements.

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What Is The Right Forex Day Trading Strategy For Me | ForexGen

Before one start trading in the forex market, It is advisable that one formulate a forex day trading strategy. This is important because the forex market is ever-changing daily. You will need different strategy for different markets scenario.
Before one can decide what the right forex day trading strategy is, it is advisable that you as the trader consult closely with your broker.Both have to discuss the optimum strategy for any particular situation.

Many different forex day trading strategies exists. According to the specific needs and desire of an investor, maximum profits can only be derived with the right strategy.Your ultimate goal is will be the deciding factor of your trading strategy.
You have to calculate and weigh the risks load that you are willing to take under the different market situations. Once you have decided the extent of risks that you will undertake, only then can the right forex day trading strategy be formulated.

Adopting the correct forex day trading strategy, you are able to position yourself correctly in a volatile market. Because forex markets are easily influence by external and internal factors, your trading strategy will guide you on how to play the market when the changes occur.
To formulate a proper forex day trading strategy, you need to study and analyze all the relevant information. The decision regarding buying and selling positions as well as holding positions will depend on market conditions. It is the strategy that you adopt, that will back you can how to react so that you can take advantage of the market changes, at any point in time.
The market conditions of the forex market are always changing. In conjunction in the changes of the market and your forex day trading strategy, you can actually turn the changes to suit you and make a profit.

Ensure that you formulate proper strategy before actually beginning trading. By taking proper steps of strategizing your investment goals, you are more likely to make a profit and minimize losses in the long run.

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Tips for every Forex trader | ForexGen Online Course

If you are experienced "FOREX" trader or just begginer , ForexGen has created ForexGen Online Course to give you the chance to get a "FOREX" education and improve your trading skills.

Lesson 5

Tips for every Forex trader

At ForexGen , we believe that proper training is essential to achieving trading success. Without the appropriate preparation and expertise, a trader's chances of succeeding are substantially reduced. Our free Forex training was created to teach our clients a strategy to day-trade currencies. Traders thatuse a strategy, or system to trade, tremendously increase their probability of success as Forex traders. ForexGen offers the following Forex Training resources:• This book as well as other Easy-Forex™ books;• A Guided Tour on the Easy-Technical analysis;• Fundamental analysis;• Access to charts, news, outlooks and research, once a trader hasregistered with the system;• Free, live 1-on-1 training online;• And finally, you can start trading – and learning – for as little as USD 25.This is your best actual training, and we recommend you view it assuch, “playing small” while you learn the market step-by-step.ForexGen not only advises you to start with a small amount of money, but makes the first step easy for you. However, before you start:• Carefully read the Terms and Conditions• We strongly advise that you read the Disclaimers and the Risk Warning• Remember: Forex is a risky business!It should not take more that a few trades to familiarize yourself with the ForexGen Trading Platform. Ideally, you will start by making a few smallertrades in order to become familiar with the market and the platform. Only then should you consider making larger trades.

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.::: Fundamental Analysis | ForexGen online Course:::.

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Lesson 4

Fundamental Analysis

Fundamentals Every Trader Should Know

Currency prices reflect the balance of supply and demand for currencies. Two primaryfactors affecting supply and demand are interest rates and the overall strength of theeconomy. Economic indicators such as GDP, foreign investment, and the trade balance reflect the general health of an economy and are, therefore, responsible for the underlyingshifts in supply and demand for that currency. There is a tremendous amount of datareleased at regular intervals, some of which is more important than others. Data related tointerest rates and international trade is looked at the closest.

Interest Rates

If the market has uncertainty regarding interest rates, then any bit of news regarding interest rates can directly affect the currency markets. Traditionally, if a country raises its interest rates, the currency of that country will strengthen in relation to other countries, asinvestors shift assets to that country to gain a higher return. Hikes in interest rates,however, are generally bad news for stock markets. Some investors will transfer moneyout of a country's stock market when interest rates are hiked, believing that higherborrowing costs will affect balance sheets negatively and result in devalued stock,causing the country's currency to weaken. Which effect dominates can be tricky, butgenerally there is a consensus beforehand as to what the interest rate move will do.Indicators that have the biggest impact on interest rates are PPI, CPI, and GDP. Generallythe timing of interest rate moves are known in advance. They take place after regularly scheduled meetings by the BOE, FED, ECB, BOJ, and other central banks.

International Trade

The trade balance shows the net difference over a period of time between a nation’sexports and imports. When a country imports more than it exports, the trade balance willshow a deficit, which is generally considered unfavorable. For example, if US consumerswanted Japanese products, major automobile dealers might sell US dollars to pay for theimport of Japanese vehicles with yen. The flow of dollars outside the US would then leadto a depreciation in the value of the US dollar. Similarly if trade figures show an increasein exports, dollars will flow into the United States due to increased confidence in theeconomy and then the value of the US dollar would increase. From the standpoint of anational economy, a deficit in and of itself is not necessarily a bad thing. However, if thedeficit is greater than market expectations then it will trigger a negative price movement.

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.:::The Main Players Of Forex| ForexGen online Course:::.

If you are experienced "FOREX" trader or just begginer , ForexGen has created ForexGen Online Course to give you the chance to get a "FOREX" education and improve your trading skills.

Lesson 3

The Main Players Of Forex

Central Banks And Governments

Policies that are implemented by governments and central banks can play a major role inthe FX market.

Central banks can play an important part in controlling the country'smoney supply to insure financial stability.

Banks

A large part of FX turnover is from banks. Large banks can literally trade billions ofdollars daily. This can take the form of a service to their customers or they themselvesspeculate on the FX market.

Hedge Funds

As known the FX market can be extremely liquid which is why it can be desirable totrade. Hedge Funds have increasingly allocated portions of their portfolios to speculate onthe FX market. Another advantage Hedge Funds can utilize is a much higher degree ofleverage than would typically be found in the equity markets.

Corporate Businesses

The FX market mainstay is that of international trade. Many companies have to import orexports goods to different countries all around the world. Payment for these goods andservices may be made and received in different currencies. Many billions of dollars areexchanged daily to facilitate trade. The timing of those transactions can dramaticallyaffect a company's balance sheet.

The Man In The Street

The man in the street also plays a part in toady's FX world. Every time he goes on holidayoverseas he normally need to purchase that country's currency and again change it backinto his own currency once he returns. Unwittingly, he is in fact trading currencies. Hemay also purchase goods and services while overseas and his credit card company has toconvert those sales back into his base currency in order to charge him.

Speculators And Investors

We shall differentiate speculator from investors here with the definition that an investorhas a much longer time horizon in which he expects his investment to yield a profit.Regardless of the difference both speculators and investors will approach the FX market.

What Next

Well now we have a basic understanding of how the FX market works and who the mainplayers are, what next? You are now going to have to decide the best way to trade themarket. The two most common approaches are that of fundamental analysis and technicalanalysis.Fundamental analysis concentrates on the forces of supply and demand for a givensecurity. This approach examines all the factors that determine the price of a security andthe real value of that security. This is referred to as the intrinsic value. If the intrinsicvalue is below the market price then there is an opportunity to buy and if the market isabove the intrinsic price then there is an opportunity to sell.Technical analysis is the study of market action, mainly through the use of charts andindicators to forecast the future price of a security. There are three main points that atechnical analyst applies:A. Market action discounts everything. Regardless of what the fundamentals are saying,the price you see is the price you get.B. The price of a given security moves in trends.C. The historical trend of a security will tend to repeat.Of all of the above things the most important of them is point A. The tools of thetechnical analyst are indicators, patterns and systems. These tools are applied to charts.Moving averages, support and resistance lines, envelopes, Bollinger bands andmomentum are all examples of indicators.There are many ways to skin a cat as the saying goes but fundamental and technicalanalysis are the two most popular ways of trading FX.

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.:::Leverage| ForexGen online Course:::.

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Lesson 2

Leverage

Spot Forex is traditionally traded in lots also referred to as contracts. The standard sizefor a lot is $100,000. In the last few years a mini lot size has been introduced of $10,000and this again may change in the years to come. As we mentioned on the previous pagecurrencies are measured in pips, which is the smallest increment of that currency. To takeadvantage of these tiny increments it is desirable to trade large amounts of a particularcurrency in order to see any significant profit or loss. We shall cover leverage later but forthe time being let's assume we will be using $100,000 lot size. We will now recalculatesome examples to see how it effects the pip value.USD/JPY at an exchange rate of 116.73(.01/116.73) X $100,000 = $8.56 per pipUSD/CHF at an exchange rate of 1.4840(0.0001/1.4840) X $100,000 = $6.73 per pipIn cases where the US Dollar is not quoted first the formula is slightly different.EUR/USD at an exchange rate of 0.9887(0.0001/ 0.9887) X EUR 100,000 = EUR 10.11 to get back to US Dollars we add afurther stepEUR 10.11 X Exchange rate which looks like EUR 10.11 X 0.9887 = $9.9957 roundedup will be $10 per pip.GBP/USD at an exchange rate of 1.5506(0.0001/1.5506) X GBP 100,000 = GBP 6.44 to get back to US Dollars we add a furtherstepGBP 6.44 X Exchange rate which looks like GBP 6.44 X 1.5506 = $9.9858864 roundedup will be $10 per pip.As we said earlier your broker may have a different convention for calculating pip value relative to lot size but however they do it they will be able to tell you what the pip valuefor the currency you are trading is at that particular time. Remember that as the marketmoves so will the pip value depending on what currency you trade.So now we know how to calculate pip value lets have a look at how you work out yourprofit or loss. Let's assume you want to buy US Dollars and Sell Japanese Yen. The rateyou are quoted is 116.70/116.75 because you are buying the US you will be working onthe116.75, the rate at which traders are prepared to sell. So you buy 1 lot of $100,000 at116.75. A few hours later the price moves to 116.95 and you decide to close your trade.You ask for a new quote and are quoted 116.95/117.00 as you are now closing your tradeand you initially bought to enter the trade you now sell in order to close the trade and youtake 116.95 the price traders are prepared to buy at. The difference between 116.75 and116.95 is .20 or 20 pips. Using our formula from before, we now have (.01/116.95) X$100,000 = $8.55 per pip X 20 pips =$171In the case of the EUR/USD you decide to sell the EUR and are quoted 0.9885/0.9890you take 0.9885. Now don't get confused here. Remember you are now selling and youneed a buyer. The buyer is biding 0.9885 and that is what you take. A few hours later theEUR moves to 0.9805 and you ask for a quote. You are quoted 0.9805/0.9810 and youtake 0.9810. You originally sold EUR to open the trade and now to close the trade youmust buy back your position. In order to buy back your position you take the price tradersare prepared to sell at which is 0.9810. The difference between 0.9810 and 0.9885 is0.0075 or 75 pips. Using the formula from before, we now have (.0001/0.9810) X EUR100,000 = EUR10.19: EUR 10.19 X Exchange rate 0.9810 =$9.99($10) so 75 X $10 =$750.To reiterate what has gone before, when you enter or exit a trade at some point your aresubject to the spread in the bid/offer quote. As a rule of thumb when you buy a currencyyou will use the offer price and when you sell you will use the bid price. So when you buya currency you pay the spread as you enter the trade but not as you exit and when you sella currency you pay no spread when you enter but only when you exit.

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.:::Forex History | ForexGen online Course:::.

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Lesson 1

Forex History

The word FOREX is derived from Foreign Exchange and is the largest financial market in the world. Unlike many markets, the FX market is open 24 hours per day and has anestimated $3 Trillion in turnover every day. This tremendous turnover is more than thecombination of all the worlds' stock markets on any given day. This tends to lead to avery liquid market and thus a desirable market to trade.

Unlike many other securities (any financial instrument that can be traded) the FX market does not have a fixed exchange. It is primarily traded through banks, brokers, dealers,financial institutions and private individuals. Trades are executed through phone andincreasingly through the Internet. It is only in the last few years that the smaller investor has been able to gain access to this market. Previously, the large amounts of deposits required precluded the smaller investors. With the advent of the Internet and growing competition it is now easily in the reach of most investors.

So now we know that the FX market is the largest in the world and that your broker orinstitution that you are trading with is collecting quotes from a centralized feed orindividual quotes comprising of interbank rates. So how are these quotes made up. Well,as we previously mentioned currencies are traded in pairs and are each assigned a symbol.For the Japanese Yen it is JPY, for the Pounds Sterling it is GBP, for Euro it is EUR andfor the Swiss Frank it is CHF. So, EUR/USD would be Euro-Dollar pair. GBP/USDwould be pounds Sterling-Dollar pair and USD/CHF would be Dollar-Swiss Franc pairand so on. You will always see the USD quoted first with few exceptions such as PoundsSterling, Eurodollar, Australia Dollar and New Zealand Dollar. The first currency quotedis called the base currency. Have a look below for some examples.

Currency symbol Currency pair

EUR/USD EUR/US Dollar

GBP/USD Pound Sterling / US Dollar

USD/JPY US Dollar / Japanese Yen

USD/CHF US Dollar / Swiss Franc

USD/CAD US Dollar/ Canadian Dollar

AUD/USD Australian Dollar/ US Dollar

NZD/USD New Zealand Dollar/US Dollar

When you see FX quotes you will actually see two numbers. The first number is calledthe bid and the second number is called the offer (sometimes called the ASK). If we usethe EUR/USD as an example you might see 0.9950/0.9955 the first number 0.9950 is thebid price and is the price traders are prepared to buy Euros against the USD Dollar. Thesecond number 0.9955 is the offer price and is the price traders are prepared to sell theEuro against the US Dollar. These quotes are sometimes abbreviated to the last two digitsof the currency such as 50/55. Each broker has its own convention and some will quotethe full number and others will show only the last two. You will also notice that there is adifference between the bid and the offer price and that is called the spread. For the fourmajor currencies the spread is normally 5 give or take a pip (we will explain pips later).To carry on from the symbol conventions and using our previous EUR quote of 0.9950bid, that means that 1 Euro = 0.9950 US Dollars. In another example if we used theUSD/CAD 1.4500 that would mean that 1 US Dollar = 1.4500 Canadian Dollars.

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