Indonesian Forex Brokers
A huge variety of people are choosing to invest in the Forex market, including ordinary people, as well as large financial institutions. Free of barriers to trade, forex trading offers the most equitable trading arena for all levels of customer.
FOREX investors never have to worry about being "stuck" in a position due to a lack of market interest. Liquidity is a powerful attraction to any investor as it suggests the freedom to open or close a position at will.
Because the market is highly liquid, most trades can be executed at a single market price. This avoids the problem of slippage found in futures and other exchange-traded instruments where only limited quantities can be traded at one time at a given price.
FOREX investors are permitted to trade foreign currencies on a highly leveraged basis - up to times their investment with some brokers. An individual can react to news when it breaks, rather than waiting for the opening bell when everyone else has the same information, as is the case in many markets. This may enable market participants to take positions before an important piece of information is fully factored into the exchange rate.
High liquidity and 24 hour trading allow market participants to exit or open a new position regardless of the hour. FOREX investors have greater flexibility with respect to their desired trade quantity. Size or quantity flexibility can be especially useful to corporate treasurers who need to hedge a future cash flow or portfolio managers who need to hedge foreign equity exposure.
This concept, a corollary to point 4, allows you to trade for various settlement dates or 'maturities' out to 1 year further allowing you to tailor your trades or hedges to your specific needs. This feature of trading FOREX differs from futures where settle dates are relegated to 4 'expirations' per year, and can also be quite useful to corporate treasurers and portfolio managers.
Currencies are traded in pairs, for example US dollar vs. Every position involves the selling of one currency and the buying of another.
If one believes the Swiss franc will appreciate against the dollar, one can sell dollars and buy Swiss francs. Or if one holds the opposite belief, one can buy dollars for Swiss francs. The potential for profit exists as long as there is movement in the exchange rate or price.
One side of the pair is always gaining, and provided the investor picks the right side, a potential for profit ALWAYS exists. Usually, it's not until the next morning when you read it in the newspaper that you find out that earnings forecasts have been revised downward; or that an insider at a particular company has resigned; or that some other influential piece of information was released that you were not privy to.
Imagine how much money you could have saved had you known this vital information at the same time as all other market 'insiders. As an investor it is important for you to understand the differences between cash FOREX and currency futures. In currency futures, the contract size is predetermined. Furthermore, currency futures trade in non-USD denominated currency amounts only whereas in spot FOREX, an investor can trade either in currency denominations, or in the more conventionally quoted USD amounts.
The currency futures pit, even during Regular IMM International Money Market hours suffers from sporadic lulls in liquidity and constant price gaps.
With IMM futures one is limited in the currency pairs he can trade - Most currency futures are traded only versus the USD - With spot forex, as with MoneyTec Trader one may trade foreign currencies vs.
Who Are Forex Market Participants? Banks The interbank market caters for both the majority of commercial turnover as well as enormous amounts of speculative trading every day. It is not uncommon for a large bank to trade billions of dollars on a daily basis. Some of this trading activity is undertaken on behalf of customers, but a large amount of trading is also conducted by proprietary desks, where dealers are trading to make the bank profits.
The interbank market has become increasingly competitive in the last couple of years and the god-like status of top foreign exchange traders has suffered as the equity guys are back in charge again. A large part of the banks' trading with each other is taking place on electronic brooking systems that have negatively affected the traditional foreign exchange brokers.
Interbank Brokers Until recently, the foreign exchange brokers were doing large amounts of business, facilitating interbank trading and matching anonymous counterparts for comparatively small fees. Today, however, a lot of this business is moving onto more efficient electronic systems that are functioning as a closed circuit for banks only.
Still, the broker box providing the opportunity to listen in on the ongoing interbank trading is seen in most trading rooms, but turnover is noticeably smaller than just a year or two ago. Customer Brokers For many commercial and private clients, there is a need to receive specialised foreign exchange services. There is a fair amount of non-banks offering dealing services, analysis and strategic advice to such clients. Many banks do not undertake trading for private clients at all, and do not have the necessary resources or inclination to support medium sized commercial clients adequately.
The services of such brokers are more similar in nature to other investment brokers and typically provide a service-orientated approach to their clients. Investors and Speculators As in all other efficient markets, the speculator performs an important role taking over the risks that commercial participants do not wish to be exposed to. The boundaries of speculation are unclear, however, as many of the above mentioned participants also have speculative interests, even some of the central banks.
The foreign exchange markets are popular with investors due to the large amount of leverage that can be obtained and the ease with which positions can be entered and exited 24 hours a day. Trading in a currency might be the "purest" way of taking a view on an overall local market expectation, much simpler than investing in illiquid emerging stock markets.
Taking advantage of interest rate differentials is another popular strategy that can be efficiently undertaken in a market with high leverage. Commercial Companies The commercial companies' international trade exposure is the backbone of the foreign exchange markets. Protection against unfavourable moves is an important reason why these markets are in existence, although it sometimes appears to be a chicken and egg situation - which came first and which produces the other?
Commercial companies often trade in sizes that are insignificant to short term market moves, however, as the main currency markets can quite easily absorb hundreds of millions of dollars without any big impact. But it also clear that one of the decisive factors determining the long-term direction of a currency's exchange rate is the overall trade flow.
Some multinational companies can have an unpredictable impact when very large positions are covered, however, due to exposures that are not commonly known to the majority of market participants. Central Banks The national central banks play an important role in the foreign exchange markets. Ultimately, the central banks seek to control the money supply and often have official or unofficial target rates for their currencies. As many central banks have very substantial foreign exchange reserves, the intervention power is significant.
Among the most important responsibilities of a central bank is the restoration of an orderly market in times of excessive exchange rate volatility and the control of the inflationary impact of a weakening currency. It is by no means always that a central bank achieves its objectives, however. If the market participants really wants to take on a central bank, the combined resources of the market can easily overwhelm any central bank.
Hedge Funds Hedge funds have gained a reputation for aggressive currency speculation in recent years. There is no doubt that with the increasing amount of money some of these investment vehicles have under management, the size and liquidity of foreign exchange markets is very appealing.
The leverage available in these market allow such fund to speculate with tens of billions at a time and the herd instinct that is very apparent in hedge fund circles means that getting Soros and friends on your back is less than pleasant for a weak currency and economy. It is unlikely, however, that such investments would be successful if the underlying investment strategy was not sound and therefore it is argued that hedge funds actually perform a beneficial service by exploiting and exposing unsustainable financial weaknesses, forcing realignment to more realistic levels.
What Influences the Market? The primary factors that influence exchange rates are the balance of international payments for goods and services, the state of the economy, political developments as well as various other psychological factors.
In addition, fundamental economic forces such as inflation and interest rates will constantly influence currency prices. In addition Central banks sometimes participate in the FOREX market by buying extremely large sums of one currency for another - this is referred to as Central Bank intervention. Central banks can also influence currency prices by changing their country's short-term interest rate to make it relatively more or less attractive to foreigners.
Any of these broad-based economic conditions can cause sudden and dramatic currency price swings. The fastest moves, however, occur usually when information is released that is unexpected by the market at large. This is a key concept because what drives the currency market in many cases is the anticipation of an economic condition rather than the condition itself.
Activities by professional currency managers, generally on behalf of a pool of funds, have also become a factor moving the market. While professional managers may behave independently and view the market from a unique perspective, most, if not all, are at least aware of important technical chart points in each major currency.
As the market approaches major 'support' or 'resistance' levels, price-action becomes more technically oriented and the reactions of many managers are often predictable and similar. These market periods may also result in sudden and dramatic price swings. Traders make decisions on both technical factors and economic fundamentals.
Technical traders use charts to identify trading opportunities whereas fundamentalists predict movements in exchange rates by interpreting a wide variety of data, which range from breaking news to economic reports. I'm so happy to recommend him to everyone Mr Robben Heckbet can help you recover from all you have lost.
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