US – Trading POC

What Is A Currency Cross Pair In Forex Trading

Posted on October 9, 2019 by blogger

A currency cross pair, also referred to as cross-currency pair or simply as a cross, involves a pair of currencies neither of which is the United States dollar. An example of a currency cross pair is the GBP/JPY, in which the two currencies in the quote are the British pound and the Japanese yen. Other examples include EUR/JPY, EUR/CAD, CHF/JPY, and AUD/CHF.

In ancient times, if you wanted to convert one currency to another, you would be required to first exchange the former into US dollars before exchanging the dollar amount into your desired currency. As an example, if an individual wanted to convert his British pound into Japanese yen, he would be required to start by exchanging the pounds into the almighty dollar, and then exchange these dollars into yen. Cumbersome, is it?

However, with the advent of the concept of cross-currency pairs, this cumbersome process has been simplified. It is now possible to exchange one currency for another while bypassing to first convert it to the United States dollar. Therefore, currency cross pairs allows for a direct exchange between two currencies.

To calculate currency crosses is not difficult. For example, if we want to get the bid/ask price for GBP/CHF, we will start by looking at the bid/ask price for both GBP/USD and USD/CHF. We will look at these pairs because both of them have the United States dollar as their common denominator. GBP/USD and USD/CHF are known as the legs of GBP/CHF since they are the United States dollar pairs linked with it.

Now, if we found the following prices for the pairs:
GBP/USD: 1.5000 (bid)/ 1.5005 (ask)
USD/CHF: 0.9800 (bid)/ 0.9803 (ask)
Then, to determine the bid price for GBP/CHF, we simply multiply the bid prices for GBP/USD and USD/CHF. If we do the math, this comes to 1.4700. To get the ask price for GBP/CHF, we multiply the ask prices for GBP/USD and USD/CHF, and this comes to 1.4709.

Currency cross pairs are important in the foreign exchange market because they create more opportunities for traders by providing them with more currencies to trade. Basically, the chart patterns formed by crosses are cleaner than they are on the other major currency pairs; thus, they are easier to forecast. If you want to keep off from trading the United States dollar because of a major occurrence or any other thing, then cross currency pairs is the best alternative.

The Inner Workings Of Currency Trading

Posted on March 3, 2019 by blogger

Forex trading or Foreign Exchange Trading refers to the simultaneous trading-that is, buying and selling-of two different currencies. It is done between and among major financial institutions, central banks, small retail currency traders or speculators, large international companies, government institutions, companies with overseas operations and the like.

Based on the amount of money being traded, the international forex trading market is the world’s biggest financial market. Everyday, forex trading market gets an average revenue of $US 1 trillion-an amount far greater than the total revenues produced by all the stock and bond markets in the world.

Characteristics

Forex trading is a kind of over-the-counter trading-it occurs directly between to financial institutions or currency traders. The trading markets may be interconnected but there is no single unified market. Hence, there is also no single or standard rate. Each rate or price depends on what is being traded. However, the traders traditionally use nearly similar rates.

Another characteristic of a forex trading is that it operates 24 hours; thus, one can trade any time of the day. Also, there is no need of an exchange floor, it operates through a global electronic network where trading occurs over the telephone and computer networks. This characteristic also prevents delays that consume a lot of time.

Forex trading market is also very competitive and is highly liquid. This allows the parties to get low dealing costs and better price.

Top Currency Traders and Major Currencies Traded

Wall Street Journal Europe says ten major currencies account for 73 percent of the total forex trading volume. Among them are Deutsche Bank, UBS, Citigroup, HSBC, Barclays, Merrill Lynch, J.P. Morgan Chase, Goldman Sachs, ABN Amro, and Morgan Stanley.

Among the currencies mostly traded are the US, Canadian, and Australian dollars; Euro; Yen; and Swiss Franc.

A study conducted by the Bank for International Settlements says that the most traded products are Euro/USD, USD/JPY, and GBP/USD. The study noted that in spite euro’s continuous growth, forex trading market remains to be concentrated in dollars.

The Trade

Trade happens when you accept the offered price and when the dealer confirms. Exchange floor is no longer required, as mentioned earlier.

In every trade, two currencies are always involved and the currencies traded serve as the products traded. Each currency has a price expressed in another currency such as 1 euro is equivalent to 1.204 dollar. In the said example, the euro trader sells the euro and buys the dollar. There are no further costs in the trade. There are no commissions and other fees as well.

Large multinational companies engage in forex trading when they are buying from and selling goods to other countries. However, this kind of forex trading encompass only a small portion of he daily activities in the foreign exchange market. Most of the trading activities are carried out by currency speculators who earn from the changes in value of a particular currency.

Key players in the Market

BIS study shows that more than 50%of the forex trading transactions are interbank transactions. Trading revenues of most commercial establishments and currency speculators are deposited in the bank.

Central banks also play a big role in the forex trading market. These banks control the supply of money, interest, inflation and target rates in order to stabilize the forex trading market.

Forex Trading Tip – A Simple Powerful One for Huge Profits

Posted on December 8, 2018 by blogger

Here we are going to give you a simple forex trading tip that is simple to learn, easy to use and can help you spot big trend changes in advance so here it is.

Its learning to spot bullish or bearish extremes in the market by using news stories – but your not going to be interested in the story itself just its influence on price.

Let’s look at it in more detail (and show you a live example of this tip in action) and start with a simple equation which is an essential part of any trader’s forex education:

Fundamentals + Investor Perception = Forex Prices

The fundamentals are there for everyone to see – but we all see them differently, drawing our own conclusions on what they mean and this huge mass of opinions equals the market price.

It’s a fact that as humans we are subject to our emotions when we trade.

The vast majority of traders are subject to greed and fear when buying or selling currencies. It is these emotions of greed and fear that always cause prices to spike to far away from fair value, as the investor psychology becomes to bullish or bearish.

Throughout history the most important market tops have formed when the news is most bullish and market bottoms when the news is most bearish.

What you need to look for in news stories is:

A bullish or bearish extreme in investor sentiment, then look for bullish or bearish news which does not rally the market when it’s bullish or see a sell off when it’s bearish.

Let’s look at a real life scenario and how this works.

For the last week the vast majority of traders ( around 90% ) have been expecting the Fed to cut US interest rates by 50 bps. On Thursday the Fed chairman spoke and seemed to confirm this – the vast majority of analysts then predicted a huge dollar sell off of the dollar against the euro – but it never came.

Why?

Because this news has been discounted earlier and the market hardly moved.

The euro hit a resistance level at 1.48 and this level is holding. This shows that the bearish dollar news is discounted and the Dollar has already absorbed the interest rate cut news in full.

So with the market stalling at a key resistance level, its time to look at the forex charts, for a turn down in price momentum and sell the euro.

While many in the news have been calling for a massive dollar sell off the charts are telling a different story.

Its time to buy the dollar has been pushed to far away from fair value.

We would expect the euro to trade below 1.40 in the next few months despite the vast majority of traders thinking it is going too sold into oblivion.

There is an old saying:

” If you can hold your head when everyone around you is losing theirs you probably haven’t heard the news”

In trading terms you have – but you are seeing the news in a completely different way to the majority, by drawing conclusions based upon its impact on price.

This forex trading tip will put you opposite the majority most of the time but as the majority lose that’s no bad thing. Learn to step back from the crowd and draw different conclusions, this forex trading tip can make huge profits and help you enjoy currency trading success.

PROFESSIONAL FOREX TRADING COURSE
and FREE ESSENTIAL TRADER PDFS

For free 2 x trading Pdf’s with 90 of pages of essential info and an exclusive Currency Trading Course For Beginners visit our website at: http://www.learncurrencytradingonline.com

Gold Trading Basics – How To Snugly Send Gold Coins In The Mail

Posted on June 16, 2018 by blogger

Buying and selling precious metals such as gold coins in reputable dealers or companies, will save you from ache since you are certain that these dealers do have their individual secured mailing services.

However, if you are going to ship your gold coins or other precious metals or valuables by mail, it will make you concerned, anxious and awkward until the receiver has completely confirmed that he has received the pieces safe and sound. Cited below are important ways on how to safely mail valuables like gold coins:

Tip Number 1 – Discover Your Gold Coin Value

Before you visit the post office near you, you must first determine the value of your gold coins. You may check the value of your gold coins either online or by visiting a trustworthy coin dealer.

Tip Number 2 – Create Your Packaging Inventory

Making a packing inventory will help you keep your sanity especially if you are sending multiple orders. Also, it will help you in managing your items productively. What you need to include in your list are your name, contact numbers, mailing address and the complete list of listing. Make 2 copies. For yourself and the one you will be sending the valuables to.

Tip Number 3 – Choose Whether Priority Mail Flat Rate Boxes Or First Class Mail

You may select flat rate box which allows you to transport anything that fits into the box for a fixed costing, anywhere in the US but it should not weigh over 70 pounds. This kind of priority mail is ideal if you are ready to send more than two coins. But if you are shipping only one or two coins, it is better to elect for the first class mail.

Tip Number 4 – Protect Your Pieces and Get a Coin Holder

Coins should be handled with extra care and it should be shipped in a coin holder. This will protect coins from possible scratches and damages. After securing your pieces, enclose the coin holder with bubble wraps.

Place them inside the box and add description. Better if you could put the order confirmation if you have sold them online. Include also a note on how to handle the piece.

Tip Number 5 – Insure Your Parcel

Inquire if your package is insured. Although, nearly all registered mails include insurance, better be sure and double check.

Tip Number 6 Do Not Disclose The Items And Use Codes

When shipping gold coins or any valuable pieces, you should never place a sign or hint on the outside of the package that you are sending something posh or precious. Instead of writing gold or silver, you can use the first letter of the word of the piece you will be sending. If sending gold coins write G C.

Tip Number 7 Understand the Schedule of Delivery

Always confirm the schedule of delivery so that you will know when to anticipate the delivery to reach the recipient. Registered mails usually take slightly longer than regular mails but they are the most safeguarded method of mailing valuables.

Tip Number 8 – Document and Keep Receipts

Keeping all receipts can serve as record of sent items and it can hedge your end if something untaward will happen. Besides, if this is your business or frequently ship gold coins, you may want to keep an online spreadsheet.

Let us face the fact that sending your gold coins or any other treasured metals through mail is the expedient and the cheapest way to send valuables. Following these steps will assure you of secured shipping by means of mail. Good luck!

Derivatives of Currency Trading and the Forex

Posted on December 23, 2017 by blogger

Options include both a call and a put. The right to buy currency is a call option while the right to sell currency is put option. The option to buy US dollars and sell Japanese yen, for example, is a yen call and dollar put. The price that the buyer agrees to pay is called the strike price or exercise price and the amount of currency that may be bought or sold is called the principal. Options may be purchased on an exchange or over-the-counter and then bought and resold. US style options are purchased on an exchange and have a strike price, expiry date and contract size. Options bought over-the-counter are bought in interbank. Options offered in the interbank market are usually European style options where the terms of the contract are negotiated between the seller and buyer.

Swaps – A swap is a combination of a spot and forwards trade. A swap involves the trade of currency on a specified date and an agreement to trade it back at a later date. A swap provides you with an alternative to borrowing foreign currency. If you need liquidity in a currency, you may swap for the needed currency. This involves a spot transaction to initiate a trade and a forward transaction to buy back the currency in the future. Large banks and corporations tend to favor swaps. Individual investors rarely engage in swaps.