Your Questions About Forex Rates

forex

Mary asks…

Conservatwits, where in this list of Forex rates do you see evidence of massive currency debasement?

http://www.forexpros.com/quotes/streaming-forexrates-%E2%80%93-majors

forex

kenspong answers:

There might not be evidence

forex

Sandy asks…

How does the forex market grow?

The average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. It is reported that the forex market will experience a growth of approximately 20% over the $3.21 trillion daily volume.

My question is how does the forex market grow at 20% rate? How does the capital flow in?

forex

kenspong answers:

Long term, forex will grow roughly in line with global GDP at 3% to 4% per year.

Any growth above that is just short term speculation. New entrants to the market are generally novices with small accounts. Most lose quickly and never return. No way that model supports 20% growth.

forex

Steven asks…

what does exchange rate mean in forex?

I googled it but i would like it to be explained so that a child can understand it.
very easy to understand.

forex

kenspong answers:

The exchange rate is whatever currencies are worth in terms of one another. For example, 1 dollar is worth .7614 euros, or 1 euro is worth 1.3134. Therefore, you can exhange one dollar for .76 euros, or you can exchange one euro for 1.31 dollars. Hence, ‘exchange rate’

finance.yahoo.com has a convenient ‘currency converter’ located at
http://finance.yahoo.com/currency-converter/

forex

Paul asks…

Has anyone traded ForEx? How did you do? What is a realistic rate of return assuming you know what your doing?

I’ve done stocks and options and stuff like that. I was curious if it is worth my time to learn it.

forex

kenspong answers:

Realistically, about 80%-90% of all traders blow out. This is not “investing” or “Buy and Hold.” This is trading, and it takes skill, knowledge, and balls of steel. It is probably the most difficult thing you will ever encounter.

You can buy $100,000 worth of currency with $1,000 margin in a standard account. This would be the purchase of one standard lot, at 100:1 leverage. Or you can get 200:1 leverage in a mini account. Wo, how much trouble can we get into now?

Just because you “can” doesn’t mean you “should” trade with this kind of leverage. Trading stocks with 2:1 leverage is considered risky.

What most people don’t seem to realize, is that you don’t have to trade with leverage at all. Just put $100,00 in your account, buy one lot, and you have zero leverage. Or put $10,000 into a mini account and buy one mini-lot, or $1000 and buy one micro-lot.

You can see that by controlling leverage, trading the Forex doesn’t have to be any more risky than trading stocks or any other investment.

The same holds true with all or any futures contract. You decide how much leverage to use, and how much risk to accept.

You can accept the maximum leverage like most people looking to “get rich quick,” and blow out like 80%-90% of all traders, or you can play it smart and ease into it slowly, starting with a simulator while you’re learning, probably for at least six months.

I’ve traded stock index futures and options about fifteen years, but have only traded currencies a few months. A lot of the same principles apply, especially the “trading” techniques. Last month my account was up 42%, and the month before it was up 40%. This month, it is down sixteen percent.

forex

Sandra asks…

How do i avoid a rollover during a forex transaction?

Its said that if i have an open trade that goes beyond 5pm et, its considered a rollover, and my account will be debited or credited with the difference in interest rates of the two currncies i’m trading in. What if i close my position before 5 et and then reopen it after 5, would that be considered a rollover? I just want to avoid the interest rate, without hampering my trading, whatever time it maybe

forex

kenspong answers:

If you close the trade and reopen it, this will work, you will avoid the interest payment, but you have to pay the spread again and continue paying the spread everytime you do it. Its not worth it.

Suggestion contact various brokers and have them email you their rollovers (swaps) schedule before you open an account, the rollover interset varies widely from broker to broker.

If you BUY the AUD/USD or AUD/JPY , these two pairs pay generous swaps daily. Instead of avoiding the interest rate you get paid and put it in your pocket every day and pay the spread once. I held the AUD/USD 41 days and my swaps were awesome. Along with 375 pips in profit.

Http://theforexheatmap.blogspot.com/2009/07/forex-educationa-post-5-draft.html
Also read lesson 3 and 4 several times concerning forex brokerage in my 35 part series.

Good Trading
Mark Mc Donnell
http://www.forexearlywarning.com/
Yahoo Answers Level 3 Responder

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