Tom Aikins

Forex For Beginners, Part 1

Vantage Forex is a forex broker website that provides top-quality online forex trading services to traders using a metatrader platform and forex trading experience.

In the foreign exchange market or forex market, rollover is a means of stretching the arranged clearing date or what is known as the settlement date of an open position. Mostly, in common currency trades, trades are to be completed in two business days. Traders who want to stretch their positions with no intention of settlement must close their positions before 5:00 pm Eastern Standard Time on the date of settlement day, and re-open the positions the next trading day. This means rolling over the position. This at the same time closes the existing positions at the daily close rate and then comes into a new opening rate at the next trading day. This actually means that the trader is indirectly extending the settlement day by one more day.
This is also called the “tomorrow next strategy.” It works in forex because many traders do not  want delivery of the currency they buy but instead they intend to get more profit from fluctuating exchange rates. Because rollovers extend the settlement by another two trading days, it may cause a gain or a cost to the trader depending on the existing rates.
Apparently, rollover is when an investor reinvests funds from a mature security into a new issue of the same or a similar security. The investor is transferring the holdings of one retirement plan to another without the agony of tax effects. A charge is incurred by forex investors who extend their positions on the following delivery date.
Rollover interest is the net result of the money borrowed by an investor to purchase another currency; this interest is paid on the borrowed currency and earned on the purchased currency. To calculate this, you should get the short-term interest rates of each currency, the existing exchange rate of the currency pair and the number of the currency pair purchased. For instance, an investor possesses 15,000 CAD/USD. The present rate is 0.9155, the short term interest rate on the Canadian dollar (base currency) is 4.50% and the short term interest on the US dollar (quoted currency) is 3.75%, so the interest would be $33.66 [{15,000 x (4.50% - 3.75%)} / (365 x 0.9155)].
If, however, the short term interest rate on the base currency is lower than the short term interest rate of the borrowed currency, the interest rate would result in a negative number which may generate a slight loss in the investor account.  This charge can be avoided by taking a closed position on the currency pair. If an option that is about to expire is quite favorable to grip, the investor can either buy or sell the later expiring option. Always note the interest rate that is paid by a currency trader or any that he may have received in the course of these forex trades is considered by the IRS as ordinary interest income or expense. For tax purposes, the trader of the currency should always keep track the interest received or paid separate from regular trading gains or losses.

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Praveen Ortec

Forex Strategies

This article is about forex trading strategies. Know more about various forex strategies used by forex traders for maximizing their profit and also minimizing their loss. Learn about the need of a forex strategy for an online forex trader.


Forex strategies are essential for a forex trader to profit from the market. Forex trading strategies make a trader more sophisticated and confident by helping him in making right calculations about the market. In a market with always changing exchange rates it is foolishness to trade hysterically by just following the emotions or advices from unreliable sources.
There are lots of forex trading strategies followed by forex traders. They can be broadly classified in to two type of strategies are profit maximizing strategies and risk minimizing strategies. The strategy differs with individuals as each trader has unique needs and has unique trading abilities. A trader must design a forex trading strategy according to many factors such as his or her initial investment, account size, trading ability, risk tolerance, currency pairs trading, geographical limitations/advantages, the broker to which he is affiliated, the trading system he/she uses, the profit goal (short-term profit or long-term profit), etc.
The most followed forex profit maximizing strategy is the leverage. Leverage allows forex traders to trade with more funds than in his or her account. The leverages are provided by the forex brokers to their clients. The usual leverage is 100:1 – i.e., for $1 in account the trader can borrow $100 from his broker. Day traders get much more leverage than other traders and the ratio leverage differ with brokers and also with the account minimum, type of contract trading etc.
The most popular forex risk minimizing strategy is the stop loss order. Stop loss orders help traders to limit their loss by stopping a trade at a preset price. Forex trading systems allows traders to set their stop loss order prices. One related strategy is the trailing stop losses, which are proportional stop loss prices that come into play only when the prices are falling. There are also many other types of stop loss orders available which mainly depends on the broker to which the trader is affiliated to.
One another related strategy is the automated order entry. Automated order entry enables a trader to enter into a trade at a preset price rate automatically. The trader can set the price at his trading platform. Automated order entry methods help traders to enter the market at most favorable time. Apart from these strategies forex traders can use forex futures and forex options to cover the loss and well as to cover the profit. These contracts help forex traders to buy or sell currencies at a predetermined rate at a point of time in future.
Apart from these trading strategies, forex trader follow many other strategies for choosing currency pairs, trading hours, entrance and exit prices etc. Irrespective of the type of the strategy, all forex strategies involve risks. The success of a forex strategy depends on many factors like the market condition and the discipline of the trader.

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Trading in foreign currencies, " Forex "

Trading in foreign currencies, also called forex, allows trading 24-hours a day, five days a week, in the largest and most liquid market in the world. If you are interested in working part-time, and possibly earning a living sitting at home, then you have come to the right place!

Here , you will find all the resources you need to get started trading in forex

The forex market is a non-stop cash market where currencies of nations are traded, typically via brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets, hence investments appreciate or depreciate in value based upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events.

The main enticements of currency dealing to private investors and attractions for short-term forex trading are:

• 24-hour trading, 5 days a week with access to global forex dealers
• An enormous liquid market making it easy to trade most currencies
• Volatile markets offering profit opportunities
• Standard instruments for controlling risk exposure
• The ability to profit in rising or falling markets
• Leveraged trading with low margin requirements
• Many options for zero commission trading

Forex trading
The investor's goal in forex trading is to profit from foreign currency movements. Forex trading is always done in currency pairs. When trading currencies, trade only when you expect the currency you are buying to increase in value relative to the currency you are selling. If the currency you are buying does increase in value, you must sell back the other currency in order to lock in a profit. An open trade (also called an open position) is a trade in which a trader has bought or sold a particular currency pair and has not yet sold or bought back the equivalent amount to close the position.

Private investors can trade in forex directly or indirectly through:

• The spot market
• Forwards and futures
• Options
• Contracts for difference
• Spread betting

It is estimated that anywhere from 70% to 90% of the forex market is speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency.

Exchange rate
Currencies are traded in pairs and exchanged one against the other when traded, so the rate at which they are exchanged is called the exchange rate. The majority of the currencies are traded against the US dollar (USD). The four next-most traded currencies are the euro (EUR), the Japanese yen (JPY), the British pound sterling (GBP) and the Swiss franc (CHF). These five currencies make up the majority of the market and are called the major currencies or "the majors". Some sources also include the Australian dollar (AUD) within the group of major currencies.

Margin
Banks and/or online trading providers need collateral to ensure that the investor can pay in case of a loss. The collateral is called the margin and is also known as minimum security in forex markets. In practice, it is a deposit to the trader's account that is intended to cover any currency trading losses in the future. Margin enables private investors to trade in markets that have high minimum units of trading by allowing traders to hold a much larger position than their account value.

Leveraged financing
Leveraged financing is the use of credit, such as a trade purchased on a margin. It is very common in forex trading, and results in being able to control $100,000 for as little as $1,000.

Risks
Although Forex trading can lead to very profitable results, there are risks involved: exchange rate risks, interest rate risks, credit risks, and country risks. Approximately 80% of all currency transactions last a period of seven days or less, while more than 40% last fewer than two days. Given the extremely short lifespan of the typical trade, technical indicators heavily influence entry, exit and order placement decisions.