Forex

What is FOREX?FOREX (FOReign EXchange market) is an international foreign exchange market, where money is sold and bought freely. In its present condition FOREX was launched in the 1970s, when free exchange rates were introduced, and only the participants of the market determine the price of one currency against the other proceeding from supply and demand.As far as the freedom from any external control and free competition are concerned, FOREX is a perfect market. It is also the biggest liquid financial market. According to various assessments, money masses in the market constitute from 1 to 1.5 trillion US dollars a day. (It is impossible to determine an absolutely exact number because trading is not centralized on an exchange.) Transactions are conducted all over the world via telecommunications 24 hours a day from 00:00 GMT on Monday to 10:00 pm GMT on Friday. Practically in every time zone (that is, in Frankfurt-on-Main, London, New York, Tokyo, Hong Kong, etc.) there are dealers who will quote currencies.FOREX is a more objective market, because if some of its participants would like to change prices, for some manipulative purpose, they would have to operate with tens of billions dollars. That is why any influence by a single participants in the market is practically out of the question. The superior liquidity allows the traders to open and/or close positions within a few seconds. The time of keeping a position is arbitrary and has no limits: from several seconds to many years. It depends only on your trading strategies. Although the daily fluctuations of currencies are rather insignificant, you may use the credit lines, that are accessible even to currency speculators with small capitals ($ 1,000 - 5,000), where the profit may be impressive. (You can learn more about it in the section: The main principles of trading.)The idea of marginal trading stems from the fact that in FOREX speculative interests can be satisfied without a real money supply. This decreases overhead expenses for transferring money and gives an opportunity to open positions with a small account in US dollars, buying and selling a lot of other currencies. That is, on can conduct transactions very quickly, getting a big profit, when the exchange rates go up or down. Many speculative transactions in the international financial markets are made on the principles of marginal trading.Margin trading is trading with a borrowed capital. Marginal trading in an exchange market uses lots. 1 lot equals approximately $100,000, but to open it it is necessary to have only from 0.5% to 4% of the sum.For example, you have analyzed the situation in the market and come to the conclusion that the pound will go up against the dollar. You open 1 lot for buying the pound (GBP) with the margin 1% (1:1000 leverage) at the price of 1.49889 and wait for the exchange rate to go up. Some time later your expectations become true. You close the position at 1.5050 and earn 61 pips (about $ 405). For the calculation of 1 pip click here.Everyday fluctuations of currencies constitute about 100 to 150 pips, giving FX traders an opportunity to make money on these changes.In FOREX, it's not obligatory to buy some currency first in order to sell it later. It's possible to bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account.Until recently, foreign exchange brokers did large amounts of business, facilitating interbank trading and matching anonymous counterparts for small fees. Today, however, much of this business has moved on to more efficient electronic systems, such as EBS (now owned by ICAP), Reuters Dealing 3000 Matching (D2), the Chicago Mercantile Exchange, Bloomberg and TradeBook(R). The broker squawk box lets traders listen in on ongoing interbank trading and is heard in most trading rooms, but turnover is noticeably smaller than just a few years ago.[edit] Commercial companiesAn important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators, and their trades often have little short term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when very large positions are covered due to exposures that are not widely known by other market participants.[edit] Central banksNational central banks play an important role in the foreign exchange markets. They try to control the money supply, inflation, and/or interest rates and often have official or unofficial target rates for their currencies. They can use their often substantial foreign exchange reserves to stabilize the market. Milton Friedman argued that the best stabilization strategy would be for central banks to buy when the exchange rate is too low, and to sell when the rate is too high — that is, to trade for a profit based on their more precise information. Nevertheless, the effectiveness of central bank "stabilizing speculation" is doubtful because central banks do not go bankrupt if they make large losses, like other traders would, and there is no convincing evidence that they do make a profit trading.The mere expectation or rumor of central bank intervention might be enough to stabilize a currency, but aggressive intervention might be used several times each year in countries with a dirty float currency regime. Central banks do not always achieve their objectives, however. The combined resources of the market can easily overwhelm any central bank. Several scenarios of this nature were seen in the 1992-93 ERM collapse, and in more recent times in Southeast Asia.[edit] Investment management firmsInvestment management firms (who typically manage large accounts on behalf of customers such as pension funds and endowments) use the foreign exchange market to facilitate transactions in foreign securities. For example, an investment manager with an international equity portfolio will need to buy and sell foreign currencies in the spot market in order to pay for purchases of foreign equities. Since the forex transactions are secondary to the actual investment decision, they are not seen as speculative or aimed at profit-maximization.Some investment management firms also have more speculative specialist currency overlay operations, which manage clients' currency exposures with the aim of generating profits as well as limiting risk. Whilst the number of this type of specialist firms is quite small, many have a large value of assets under management (AUM), and hence can generate large trades.[edit] Hedge fundsHedge funds, such as George Soros's Quantum fund have gained a reputation for aggressive currency speculation since 1990. They control billions of dollars of equity and may borrow billions more, and thus may overwhelm intervention by central banks to support almost any currency, if the economic fundamentals are in the hedge funds' favor.[edit] Retail forex brokersRetail forex brokers or market makers handle a minute fraction of the total volume of the foreign exchange market. According to CNN, one retail broker estimates retail volume at $25-50 billion daily, which is about 2% of the whole market and it has been reported by the CFTC website that unexperienced investors may become targets of forex scams.[edit] Trading characteristicsThere is no single unified foreign exchange market. Due to the over-the-counter (OTC) nature of currency markets, there are rather a number of interconnected marketplaces, where different currency instruments are traded. This implies that there is no such thing as a single dollar rate - but rather a number of different rates (prices), depending on what bank or market maker is trading. In practice the rates are often very close, otherwise they could be exploited by arbitrageurs.Top 6 Most Traded CurrenciesRankCurrencyISO 4217 CodeSymbol1United States dollarUSD$2Eurozone euroEUR€3Japanese yenJPY¥4British pound sterlingGBP£5-6Swiss francCHF-5-6Australian dollarAUD$The main trading centers are in London, New York, Tokyo, and Singapore, but banks throughout the world participate. Currency trading happens continuously throughout the day; as the Asian trading session ends, the European session begins, followed by the US session and then back to the Asian session, excluding weekends.There is little or no 'inside information' in the foreign exchange markets. Exchange rate fluctuations are usually caused by actual monetary flows as well as by expectations of changes in monetary flows caused by changes in GDP growth, inflation, interest rates, budget and trade deficits or surpluses, large cross-border M&A deals and other macroeconomic conditions. Major news is released publicly, often on scheduled dates, so many people have access to the same news at the same time. However, the large banks have an important advantage; they can see their customers' order flow.Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.3045 dollar. Out of convention, the first currency in the pair, the base currency, was the stronger currency at the creation of the pair. The second currency, counter currency, was the weaker currency at the creation of the pair.The factors affecting XXX will affect both XXX/YYY and XXX/ZZZ. This causes positive currency correlation between XXX/YYY and XXX/ZZZ.On the spot market, according to the BIS study, the most heavily traded products were:EUR/USD - 28 %USD/JPY - 18 %GBP/USD (also called sterling or cable) - 14 %and the US currency was involved in 89% of transactions, followed by the euro (37%), the yen (20%) and sterling (17%). (Note that volume percentages should add up to 200% - 100% for all the sellers, and 100% for all the buyers).Although trading in the euro has grown considerably since the currency's creation in January 1999, the foreign exchange market is thus far still largely dollar-centered. For instance, trading the euro versus a non-European currency ZZZ will usually involve two trades: EUR/USD and USD/ZZZ. The only exception to this is EUR/JPY, which is an established traded currency pair in the interbank spot market.[edit] Factors affecting currency tradingSee also: Exchange ratesAlthough exchange rates are affected by many factors, in the end, currency prices are a result of supply and demand forces. The world's currency markets can be viewed as a huge melting pot: in a large and ever-changing mix of current events, supply and demand factors are constantly shifting, and the price of one currency in relation to another shifts accordingly. No other market encompasses (and distills) as much of what is going on in the world at any given time as foreign exchange.Supply and demand for any given currency, and thus its value, are not influenced by any single element, but rather by several. These elements generally fall into three categories: economic factors, political conditions and market psychology.[edit] Economic factorsThese include economic policy, disseminated by government agencies and central banks, economic conditions, generally revealed through economic reports, and other economic indicators.Economic policy comprises government fiscal policy (budget/spending practices) and monetary policy (the means by which a government's central bank influences the supply and "cost" of money, which is reflected by the level of interest rates).Economic conditions include:Government budget deficits or surpluses: The market usually reacts negatively to widening government budget deficits, and positively to narrowing budget deficits. The impact is reflected in the value of a country's currency.Balance of trade levels and trends: The trade flow between countries illustrates the demand for goods and services, which in turn indicates demand for a country's currency to conduct trade. Surpluses and deficits in trade of goods and services reflect the competitiveness of a nation's economy. For example, trade deficits may have a negative impact on a nation's currency.Inflation levels and trends: Typically, a currency will lose value if there is a high level of inflation in the country or if inflation levels are perceived to be rising. This is because inflation erodes purchasing power, thus demand, for that particular currency.Economic growth and health: Reports such as gross domestic product (GDP), employment levels, retail sales, capacity utilization and others, detail the levels of a country's economic growth and health. Generally, the more healthy and robust a country's economy, the better its currency will perform, and the more demand for it there will be.[edit] Political conditionsInternal, regional, and international political conditions and events can have a profound effect on currency markets.For instance, political upheaval and instability can have a negative impact on a nation's economy. The rise of a political faction that is perceived to be fiscally responsible can have the opposite effect. Also, events in one country in a region may spur positive or negative interest in a neighboring country and, in the process, affect its currency.[edit] Market psychologyMarket psychology and trader perceptions influence the foreign exchange market in a variety of ways:Flights to quality: Unsettling international events can lead to a "flight to quality" -with investors seeking a "safe haven". There will be a greater demand, thus a higher price, for currencies perceived as stronger over their relatively weaker counterparts.Long-term trends: Currency markets often move in visible long-term trends. Although currencies do not have an annual growing season like physical commodities, business cycles do make themselves felt. Cycle analysis looks at longer-term price trends that may rise from economic or political trends. [3]"Buy the rumor, sell the fact:" This market truism can apply to many currency situations. It is the tendency for the price of a currency to reflect the impact of a particular action before it occurs and, when the anticipated event comes to pass, react in exactly the opposite direction. This may also be referred to as a market being "oversold" or "overbought".[4] To buy the rumor or sell the fact can also be an example of the cognitive bias known as anchoring, when investors focus too much on the relevance of outside events to currency prices.Economic numbers: While economic numbers can certainly reflect economic policy, some reports and numbers take on a talisman-like effect - the number itself becomes important to market psychology and may have an immediate impact on short-term market moves. "What to watch" can change over time. In recent years, for example, money supply, employment, trade balance figures and inflation numbers have all taken turns in the spotlight.Technical trading considerations: As in other markets, the accumulated price movements in a currency pair such as EUR/USD can form patterns that may be recognized and utilized by traders for the purpose of entering and exiting the market, leading to short-term fluctuations in price. Many traders study price charts in order to identify such patterns. [5][edit] Algorithmic trading in forexElectronic trading is growing in the FX market, and algorithmic trading is becoming much more common. There is much confusion about the technique. According to financial consultancy Celent estimates, by 2008 up to 25% of all trades by volume will be executed using algorithm, up from about 18% in 2005.[edit] Financial instrumentsThere are several types of financial instruments commonly used.Spot: A spot transaction is a two-day delivery transaction, as opposed to the futures contracts, which are usually three months. This trade represents a “direct exchange” between two currencies, has the shortest time frame, involves cash rather than a contract; and interest is not included in the agreed-upon transaction. The data for this study come from the spot market. Spot has the largest share by volume in FX transactions among all instruments.Forward transaction: One way to deal with the Forex risk is to engage in a forward transaction. In this transaction, money does not actually change hands until some agreed upon future date. A buyer and seller agree on an exchange rate for any date in the future, and the transaction occurs on that date, regardless of what the market rates are then. The duration of the trade can be a few days, months or years.Futures: Foreign currency futures are forward transactions with standard contract sizes and maturity dates — for example, 500,000 British pounds for next November at an agreed rate. Futures are standardized and are usually traded on an exchange created for this purpose. The average contract length is roughly 3 months. Futures contracts are usually inclusive of any interest amounts.Swap: The most common type of forward transaction is the currency swap. In a swap, two parties exchange currencies for a certain length of time and agree to reverse the transaction at a later date. These are not contracts and are not traded through an exchange.Options: A foreign exchange option (commonly shortened to just FX option) is a derivative where the owner has the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date. The FX options market is the deepest, largest and most liquid market for options of any kind in the world.[edit] SpeculationControversy about currency speculators and their effect on currency devaluations and national economies recurs regularly. Nevertheless, many economists (e.g. Milton Friedman) have argued that speculators perform the important function of providing a market for hedgers and transferring risk from those people who don't wish to bear it, to those who do. Other economists (e.g. Joseph Stiglitz) however, may consider this argument to be based more on politics and a free market philosophy than on economics.Large hedge funds and other well capitalized "position traders" are the main professional speculators.Currency speculation is considered a highly suspect activity in many countries. While investment in traditional financial instruments like bonds or stocks often is considered to contribute positively to economic growth by providing capital, currency speculation does not, according to this view; it is simply gambling, that often interferes with economic policy. For example, in 1992, currency speculation forced the Central Bank of Sweden to raise interest rates for a few days to 150% per annum, and later to devalue the krona. Former Malaysian Prime Minister Mahathir Mohamad is one well known proponent of this view. He blamed the devaluation of the Malaysian ringgit in 1997 on George Soros and other speculators.[6]Gregory Millman reports on an opposing view, comparing speculators to "vigilantes" who simply help "enforce" international agreements and anticipate the effects of basic economic "laws" in order to profit.In this view, countries may develop unsustainable financial bubbles or otherwise mishandle their national economies, and forex speculators only made the inevitable collapse happen sooner. A relatively quick collapse might even be preferable to continued economic mishandling. Mahathir Mohamad and other critics of speculation are viewed as trying to deflect the blame from themselves for having caused the unsustainable economic conditions.[edit] References^ Triennial Central Bank Survey (March 2005), Bank for International Settlements.^ Foreign Exchange (October 2006), International Financial Services, London.^ John J. Murphy, Technical Analysis of the Financial Markets (New York Institute of Finance, 1999), pp. 343-375.^ Investopedia^ Sam Y. Cross, All About the Foreign Exchange Market in the United States, Federal Reserve Bank of New York (1998), chapter 11, pp. 113-115.^ Gregory J. Millman, Around the World on a Trillion Dollars a Day, Bantam Press, New York, 1995.[edit] See alsoBalance of tradeBretton Woods systemCurrency pairForex scamsRetail forexForeign exchange reservesSpecial Drawing RightsWorld currencyForex swap[edit] External linksBenchmark Currency Rates from BloombergCFTC Commission Advisory Customer fraud ProtectionFederal Reserve daily updateFederal Reserve Bank of New York Foreign Exchange and related material.Financial Times - currency market dataThe average daily forex trading volume currently exceeds $1.9 trillion. With so much on the line, we've put together a list of our favorite 100 forex resources to help you become a knowledgeable forex trader. The following resources were chosen for the quality of information and training tools offered. Although some of these tools are located on commercial sites, you'll find value in materials produced by professionals. Other sites were chosen for the resources that they offered for a price (like books), but they're all geared specifically toward the forex trader. The chosen sites are written in the English language, but some individuals, businesses, and organizations are located in areas other than the United States. All sites are listed in alphabetical order within the following categories:Topics Covered in this ArticleBeginner's Paradise Blogs & News Charts Currency & Currency Converters Directories & Portals Economic Calendars & Indicators Fibonacci & Candlesticks Forecasts and Signals Forums and Communities Glossaries Market Reports Nonprofit Associations Practice Real-Time Quotes Technical Indicators X-TrasBeginner's ParadiseIf you're a forex newbie, the following sites will help you get a grip on the similarities and differences between forex trading and stock exchange trading. Take advantage of free resources before you dedicate any serious cha-ching to training.Action Forex — Learn about the forex market through free e-Books, news, insights, and much more.Currency College — Currency College delivers a variety of course offerings with classes that are held at the student’s convenience. Each class is followed by homework and tests; each course lasts about six weeks; and each class contains about ten students. Emphasis is given to risk management. This is not free education, but if you bring referrals to Currency College you could earn a scholarship toward your tuition. This site has plenty of free resources, however, like a comparative chart for various trading platforms so you can make an educated choice about trading platforms.CyberTrading University — This site offers free forex training through a two-hour video that includes a brief history, PIP spreads, majors and crosses, economic indicators, fundamental analysis, technical analysis, short-term long-term fundamentals, trading rules, leverage and margin, trading psychology, Fibonacci Retracement Levels, moving averages, oscillators, Candlestick Charts, Bollinger Bands, and more.Forex Charting 101 — A brief and basic overview of forex charts from Pip Trader. You'll discover that the charts are very similar to those that you might use for securities trading. But, some of the charts may seem more complicated if you're not a seasoned trader.Forex Realm — Possibly the most comprehensive and thorough forex education online. Learn about everything from currency codes to exotic trading strategies through articles, graphics, and concise examples.Forex-Training.com — Fairly comprehensive training with a free demo account. The highlight to this site is their explanations about various charts.FX Home Trader — Focus on the information about technical analysis, where you can learn more about Fibonacci Trading, Pivot Points, and more. Their Forex Facts also contain some valuable information.FX Power Trading Course — Offered by FXCM, this paid course is one step up from free at the current price. Learn how to time the market, recognize trends, and basics in fundamental and technical analysis through this eight-day course.Investopedia on Forex — An extensive 10-part article on forex investing, from an introduction to a recap that covers everything from benefits and risks to technical analysis. If you can't get enough of Investopedia's information, head to a list of their Forex articles, where you can learn more and download their free e-Book entitled, "High Probability Trading Setups for the Currency Market."Law of Charts — Joe Ross offers advice for traders across the board, but the information contained in his "Law of Charts" offer speaks to forex as well as any other trading strategy. He identifies chart patterns that result from human behaviors and points to entry and exit targets on those charts. You can take advantage of Ross's other tools as well, including the forum.Learn4X — This is an interesting site simply because it contains several tests that help you determine if you have the 'guts' and knowledge to be a trader. They also offer a free online seminar.Market Traders Institute (MTI) — You don't need to spend a lot of money to train in forex markets. MTI offers many free resources such as videos and lesson plans that will help you get off the ground. If you like what you hear and see, you can invest in materials for the advanced trader down the road.My Forex Trading Tools — A site that contains overviews on everything from fundamentals to options.Online Training Academy — Free basics on FX trading via video, offered by Mike McMahon. You need to register, but you can opt out of contact lists with a click of a box.School of Pipsology — A lighthearted forex education from Kindergarten to College so the beginner knows exactly where he stands in an attempt to grasp the forex market.Back to indexBlogs & NewsThe following list provides a variety of news from both professional and single-investor resources.A Forex Loser — The name of the blog ought to warn you. This blog contains a different perspective on trading, with an emphasis on trading psychology. Some great trading tips.Currency Secrets — Not updated daily, but plenty of resources in historical entries. The focus is on currency, but you can find plenty of reviews and tips here as well.DailyFX — Sponsored by Forex Capital Markets (FXCM), this site offers a free weekly trading lesson and free quarterly outlook reports.Forex News — At-a-glance links to news and analyses.Forex Project — A fascinating blog written by a forex beginner who logs his experiences in a journal, through established goals, and with a full trade history. This blogger currently is under pressure from a fulltime job, and he's considering a transition from day trading to going long on his investments. Should be an interesting read. Be sure to check out this blogger's list of references, including a nice beta risk calculator.Forex Reader — Daily currency trading news and commentary.FX Boot Camp — Wayne McDonell offers his boot camp theories for free at his blog on FXStreet (see next).FXStreet — Breaking news, commentary. Sponsored by Global Forex Trading (GFT).Peter Bain Forex Trading Commentary — Peter Bain's commentary needs to be good, as it's a tool to push his training course. You can take advantage of his free podcasts as well.Piptopia — This is Rob Booker's blog on forex. He's a currency trader and trainer and he's been at this blog for two years, so you'll find some interesting history here.Grace Cheng's Forex Blog — "Not long after my graduation, I was introduced to forex trading, and since then, have never looked back." Outside of her blog, Cheng writes for a number of trading and investment magazines.Quantitative Trading — Dr. Ernest Chan's take on automated, statistical trading strategies.Trader Mike — Michael is a trader, and this blog is a trading journal of sorts. Although he considers himself a swing/position trader, he switched to day trading in 2005. Although this blog doesn't focus on forex per se, you can learn plenty about trading strategies here.Back to indexChartsYou can't trade without charts, but the chart that you use is a matter of personal preference. The list below provides a nice pool to pick from:DailyFX Chart — You can manipulate this chart by type, time scale, view, and much more. Java based.Free Forex Charts — From simple to Premium to System Trading, simply the best choice of charts around.Forex-Market — This site offers two free, real-time charting applications, one Web-based and the other a stand-alone Java applet.Live Currency Chart — This chart, offered by FXStreet (see Blogs & News above), is also Java based. A nice feature is the Drag&Drop that allows traders to pull indicators out of the Studies window and up into the Chart window.Back to indexCurrency & ConvertersCurrencies can be confusing, especially when you learn that many lots are purchased in pairs. You can learn about specific currencies when you type the names of that currency into a search engine. For instance, you can learn more about the Euro at that currency's official site. But, if you don't know what to look for, the information found in the following sites will help you out:ADVFN Forex Symbol Table — Comprehensive list of currencies. When you click on the currency symbol you'll reach a page where that currency is represented through currency exchange rate tables and historical exchange rate charts.ExchangeRate.com — Try out the "hot" and "currency info" links that provide information about everything you'd want to know about worldwide currencies for 170 countries. Includes calculators, fun facts, serious facts, and more.Go Currency — Reliable currency converter and money conversion service.List of Currencies — This is an extensive list provided by Wikipedia that covers everything from ancient coinage to the current Yen. As with most Wikipedia lists, you might run across a link or two that doesn't contain information. But, you can use that information to search elsewhere if needed.Oanda — Excellent set of currency converter tools from historical currency exchange rates for over 164 currencies to traveler's cheat sheets to customizable products. Visit their detailed currency converter FAQ page if you have questions.X-Rates — More than a currency list or a converter, this site will bring you up-to-date on every bit of information you'd need to know as a forex trader.XE.com — A basic currency converter backed up by other tools on this site, such as current and historic rate tables and a free email currency update service.Back to indexDirectories & PortalsThe following resources offer choices beyond the ones listed here. Since forex is a booming individual trader industry, expect to find new sites popping up weekly.Earn Forex — A limited list, but some great resources broken down by category. This list is just one feature to this site, as you can access calculators, a blog, and information for beginners here.Forex Bastards — Don't let that empty page or the name put you off. Click on other categories to find some interesting resources. This is a project in the making, brought to you by the Secret Forex Society.Forex Central — You want it? They have most of it (blogs are missing). Resources aren't rated.Forex Directory — This site is a little difficult to slug through, but worth it for the resources provided.Pip Trader — This site contains a forum, live quotes and charts, news, reports, and a "mini-game" that has nothing to do with forex, but that might help you lighten up a bit.Top 100 Forex Sites — Although these sites are rated by popularity and, therefore, subject to rating scams, you can learn much from the sites that are listed simply from the variety of information that's offered here. Many sites are brokerage firms, but as I mentioned previously you can find free information on many of these sites such as news, calculators, techniques, and more.Back to indexEconomic Calendars & IndicatorsEconomic calendars and indicators are vital tools for fundamental research. The sites below will give you simple and detailed options.Economic Indicators — A government site brought to you by the Economics and Statistics Administration at the US Department of Commerce. Their mission is to provide timely access to the daily releases of key economic indicators from the Bureau of Economic Analysis and the US Census Bureau.Forex Economic Calendar — What better place to find an excellent economic calendar than a site that focuses on this tool?Global Forex Trading (GFT) — A detailed look into the next month's international monetary future based on GMT.InfoForex — Brief overviews on various sectors from Auto and Truck Sales to a Monthly Wholesale Trade report based upon the US Census.Back to indexFibonacci & CandlesticksFibonacci and Japanese Candlestick charts may seem difficult, but with the right training you can master both technical strategies.Fibonacci — This is the home page for Dr. Ron Knott's multimedia Web site on the Fibonacci numbers, the Golden section and the Golden string hosted by the Mathematics Department of the University of Surrey, UK. Simple to use, easy to understand, and filled with illustrations to help you learn why some numbers are so important to nature. These numbers are also of vast interest to many forex investors.Fibonacci Forex Indicators — Forex Planet will begin to show you how to apply Fibs to forex in this easy-to-understand lesson. But, the lesson is short, so you might try the next resource as well.Fibonacci Method in Forex charts — This lesson also applies to forex, and it offers a short tutorial on applications along with a downloadable Fib calculator.Japanese Candlesticks — FX Words offers a simple and succinct explanation for candlesticks, including bullish and bearish patterns.Japanese Candlesticks (Elliott Gann) — A comprehensive tutorial that covers all the basic terminology and explains each term with appropriate graphics, offered by the ElliottGann site.Japanese Candlestick Trading Forum — It costs to become a member, but you can access all the candlestick basics for free on this site.Back to indexForecasts and SignalsThe following resources use a mix of fundamental and technical analyses to formulate their prognoses:AceTrader — True 24 hours real-time analysis for up-to-the-minute recommendations and analysis.e-Forex — Free trading signals. Dig into their historical records to understand their precision.Forex Predictions — Currently free daily and weekly high-low signals through the Web site and by email. This site is a division of RDC Bancorp, Inc., a foreign exchange services company.Forex Signals — FinoTek provides signals and trends with charts. Check out their archived signals to determine credibility.Investica Ltd. — Online information and free e-newsletters filled with signals and forecasts.Open Forex — Daily forecasts in real trade and analytical articles on forex basic currency pairs.Back to indexForums and CommunitiesForex Factory — You'll find a Forex Beginner Q&A section as well as topics that focus on specific strategies and techniques.Forex TSD — Go ahead and lurk in this forum until you feel comfortable. Then register for free to access the forum and a calendar. The paid "elite" subscription offers detailed statements of currently more than 20 trading systems.Global View Forums — Another free forum that's been around since 1996.MoneyTec — With over 33,000 members, this traders' forum offers a format to discuss trading ideas, share, learn, and build new trading techniques and strategies.Back to indexFundamental ResearchThe following list contains comprehensive information about economic fundamentals for your research:Bureau of Economic Analysis (BEA) — Get the straight stuff from the US Department of Commerce like the pros. Everyone from the White House staff to US Trade Commission employees to trade policy officials who want to negotiate international trade agreements use the measurements contained on the BEA Web site.Consumer Price Index (CPI) — The US Department of Labor offers a ton of information just on this page alone through their links.Forex Daily Fundamentals — XpressTrade offers a daily focus on forex fundamentals.The Bank for International Settlements (BIS) - An international organization which fosters international monetary and financial cooperation and serves as a bank for central banks. As such, this organization offers valuable information through their publications and research as well as through many other resources offered on this site. They also maintain a list of Central Bank Web sites.The Fundamentals of Forex — Forex TV brings you the lowdown on what type of news would affect forex from a fundamental standpoint. You can use the information on this list to conduct further research.GlossariesForex Glossary — The only drawback to this glossary is that the "A-Z" tab doesn't include a total listing of all the terms under the single-letter tabs. Comprehensive.Forex.com Glossary — An at-a-glance glossary contained on one page.Glossary of Forex Terms [PDF] — This printable file, offered by FX International Group, contains all the basics.Back to indexGovernment RegulationAustralian Securities and Investments Commission (ASIC) — The ASIC's regulatory coverage includes the forex market. Use their search box to learn more about their reach and responsibility.Commodities Futures Trading Commission (CFTC) — The CFTC operates along the same lines as the SEC (Securities and Exchange Commission), except this government organization focuses on protecting market users and the public from fraud in the futures and option markets. So keep this site handy to stay on top of any forex scams through their Consumer Advisory on Forex Fraud. You can learn quickly what to avoid in your learning curve through a detailed forex advisory that offers information about other resources as well.Financial Services Authority (FSA) — An independent non-governmental body located in the UK, given statutory powers by the Financial Services and Markets Act 2000. Use their search box to locate information about the UK forex market and regulations.National Futures Association (NFA) — The NFA is "the premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the derivatives markets," which basically means that this organization regulates any market that depends upon future cash flows. The "investor information" section contains materials about how to find a broker and basic lessons in forex trading. Plus, they publish forex warnings, news, and they offer a place for investor disputes and complaints.Back to indexMarket ReportsKBC [PDF] — A Comprehensive "Morning Report" from this Belgian foreign exchange bank (in English).Mellon — FX Daily report from Mellon Financial Corporation, with links to American and European editions and past issues.SaxoBank — Daily market update from this foreign exchange service in London.Scotia Capital [PDF] — Daily report with corresponding links for further reading from this Canadian foreign exchange bank.UBS — Daily summary for forex markets sponsored by this Swiss foreign exchange bank.Back to indexNonprofit AssociationsAustralian Technical Analysts Association (ATAA) — A non-profit association of both professional technical analysts and anyone who uses technical analysis for private investing, trading or advising.International Compliance Association (ICA) — The ICA is a professional organization dedicated to the furtherance of best compliance and anti money laundering practice in the financial services sector.The Financial Markets Association (ACI) — ACI has the largest membership of any of the international associations in the wholesale financial markets. The Head Office is based in Paris.Back to indexPracticeSome of the best demonstration tools are owned by forex brokerages. The following were chosen for their reliability and popularity. Be aware that some brokerages will request your permission to be contacted by mail, phone, or email. In some cases you might want this contact, as they will provide support for your training. In all cases you can walk away if their training and trading platforms don't turn you on.CMS Forex — Customize your practice with unlimited funds on CMS Forex's VT Trader 1.8.5.1, a program that includes an API so that you can customize your solution. This software offers a point-and-click open and close positions directly on the chart. Access over 100 indicators, Reuters Forex related news and market analytics, and an "autopilot" feature. You can reach their customer support team by phone, live chat, or e-mail.Forex Trading USA — Free 30-day demo with a Mini ($2,000 virtual cash, 200:1 leverage, 10k lot size) or Standard ($25,000 virtual cash, 100:1 leverage, 100k lot size). Their free education is a nice plus.FXSolutions — Use $10,000 in practice funds with full access to FXSol's new charting solution, FX AccuCharts. Backed by 24/7 customer service.Global Forex Trading — Download their DealBook 360 to practice forex trading with live, dealable prices, real-time data, and free real-time breaking world and financial news. The software features forex charts, more than 85 technical indicators (for standard size GFT trading accounts) and the ability to build your own indicators. You have a choice about the amount of beginning funds, from $2,500 to $50,000.Back to indexReal-Time QuotesACM — Pick pairs and watch the quotes. ACM includes a manual [PDF] that explains in detail how to manipulate the chart to your liking. Must have Java plugin.Forex Trading Charts — Real-time forex quotes. This site also contains real-time forex charting tools with editable indicators.FXQuote — Scroll down the page, as the real-time quotes are located at bottom left. Based upon ET.Live Forex Quotes — You might recognize the GFT logo behind the rates, but don't let that distract you from the constantly changing figures. If you're addicted to live feeds, you'll be mesmerized by the constantly changing currency rates on this chart.SaxoBank — Scroll down the page a bit, as the quotes are located at the bottom left on this page, based upon GMT.Back to indexTechnical IndicatorsThe following three resources offer the most succinct information about technical overlays and indicators. You can find many more resources at some of the sites previously listed under the Beginner's section, under many of the Blogs & News resources, and at various brokerages.Forex-Business Technical Indicators — Where the other two sites offer great technical indicator explanations, this site offers 10 charts that illustrate some of those terms.IQ Chart — This company offers a list of technical overlays and indicators with short and easy-to-understand explanations. Take a look at their chart patterns while at this site, as this company is a provider of stock charting software to individual investors and technical analysts.Technical Indicators — Definitions provided by MetaQuotes Software.Back to indexX-TrasIFXTAG — The International Forex Traders Affinity Group provides individual investors access to products and services that are evaluated by top professionals and their members. IFXTAG is committed to harnessing the potential to make electronic trading work for their global community of subscribers. Membership is free, but the resources are not. Members, however, do receive free trials and discounts to various services.Secret Forex Society — A 'closed' forum and educational site where members ask you to join or you can ask to be placed on a waiting list. Go ahead and trust them. Get on the waiting list so you can access some interesting information.Traders Press, Inc. — An online bookstore specifically for traders.