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Q:
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What is Foreign Exchange?
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A:
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The Foreign Exchange market, also referred to as the "FOREX" market, is the largest
financial market in the world, with a daily average turnover of approximately $1.5
trillion. Foreign Exchange is the simultaneous buying of one currency and selling
of another. The world's currencies are on a floating exchange rate and are always
traded in pairs, for example EUR/USD or USD/JPY.
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Q:
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Why haven't I heard of Foreign Exchange?
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A:
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The answer is simple: the currency market was simply financially inaccessible to
the general population of investors and traders, and the minimum account requirements
were beyond the resources of the average investor. Since then, the situation has
changed dramatically. Now under new bank regulations, instead of a minimum investment
of $200K, accounts can be opened for $10 - $50K.
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Q:
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Who are the participants in the FOREX Market?
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A:
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The FOREX market is called an 'Interbank' market due to the fact that historically
it has been dominated by banks, including central banks, commercial banks, and investment
banks. However, the percentage of other market participants is rapidly growing,
and now includes large multinational corporations, global money managers, registered
dealers, international money brokers, future and option traders, and private speculators.
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Q:
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When is the FOREX market open for trading?
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A:
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true 24-hour market begins at 7 p.m. Sunday evening through 3 p.m. Friday EST. FOREX
trading begins each day in Sydney, and moves around the globe as the business day
begins in each financial center, first to Tokyo, then London, and New York. Unlike
any other financial market, investors can respond to currency fluctuations caused
by economic, social and political events at the time they occur - day or night.
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Q:
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What are the most commonly traded currencies in the FOREX market?
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A:
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The most often traded or 'liquid' currencies are those of countries with stable
government, respected central banks, and low inflation. Today, over 85% of all
daily transactions involve trading of the major currencies, which include the US
Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and the
Australian Dollar.
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Q:
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What is Margin?
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A:
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Margin is a faith deposit for each opened position. This deposit is used to secure
a position within the market and is added to or deducted from, when profits or loss
are in effect, then returned to the account when positions are closed.
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Q:
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How are currency prices determined?
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A:
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Currency prices are affected by a variety of economic and political conditions,
most importantly interest rates, inflation and political stability. Moreover, government
sometimes participate in the FOREX market to influence the value of their currencies,
either by selling their domestic currency in an attempt to lower the price, or conversely
buying to raise the value of their currency. This is known as Central Bank intervention.
Any of these factors, as well as large market orders, can cause high volatility
in currency prices. However, the size and volume of the FOREX market makes it impossible
for any one entity to "drive" the market for any length of time.
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Q:
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Is Foreign Exchange as risky as everyone thinks?
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A:
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One way to measure risk is to compare a financial product's risk relative to its
return. If you take the time to compare an investment in FOREX to common investments
such as equities and fixed income, you will find that from a risk/reward standpoint,
FOREX investments provide respectable returns and should be considered viable portfolio
diversification tools.
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Q:
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What is Pip?
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A:
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PIP stands for Percentage In Point. It is equal to 1/100 of 1%. In forex, currency
prices are typically quoted to the fourth decimal.
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Q:
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What is the value of 1 pip?
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A:
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In Gold Account 1 Pip = $10, Micro Account = 1 Pip = 10 Cents, Mini Account = $1
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Q:
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Which type of accounts we are offering at the moment?
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A:
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Gold, Mini and Micro
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