Forex Trading | Currency Exchange | Currency Trading | Foreign Exchange Blog » commodity futures Wed, 20 Apr 2011 04:26:46 +0000 en hourly 1 What Is Forex Day Trading? Thu, 23 Dec 2010 03:18:42 +0000 What Is Forex Day Trading? post from Forex Trading Blog

Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market close for the trading day. Traders that participate in day trading are called active traders or day traders.

Some of the more commonly day-traded financial instruments are stocks, stock options, currencies, and a host of futures contracts such as equity index futures, interest rate futures, and commodity futures. Indeed, many day traders are bank or investment firm employees working as specialists in equity investment and fund management. However, with the advent of electronic trading and margin trading, day trading has become increasingly popular among at-home traders.

As modern trading is electronic, the exchanges are run by computers, and are accessible via the Internet, so traders can work from almost anywhere in the world using only a few tools and services. Some of these tools are things like a computer, Internet access, and a telephone, so most people already have some of the tools that are needed for day trading.

There are several basic strategies by which day traders attempt to make profits:

  1. Trend following
  2. Contrarian investing
  3. Range trading
  4. Scalping
  5. Opening Only Orders
  6. Rebate trading
  7. News trading
  8. Price action
  9. Algorithmic trading

What Is Forex Day Trading? post from Forex Trading Blog

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Forex Regulation 101 Sat, 04 Dec 2010 22:05:13 +0000 Forex Regulation 101 post from Forex Trading Blog

Regulatory bodies in Forex Trading:

• National Futures Association (NFA). The NFA is the regulatory organization for the US futures and forex industry. Its role is to ensure market integrity and safeguard investors by implementing regulations. All futures or forex service operating in the US need to be a member of the NFA. This is mandatory.

• Commodity Futures Trading Committee (CFTC). The CFTC was formed in 1974 by the United States Congress to monitor the forex markets and develop the necessary regulations. The CFTC’s forex regulations assure the economic utility of the markets by encouraging their competitiveness and efficiency, and protecting market participants against and abusive forex trading practices.

• Financial Services Authority (FSA). A UK based regulatory body that works under the power of the Financial Services and Markets Act 2000. The financial services industry in the UK is entirely controlled by the FSA. Its powers include creation of regulations, its enforcement and investigation of potential concerns. The FSA is obliged to have regard to the Principles of Good Regulation.

• Various National Authorities – Many other regulatory bodies exist in their respective countries to regulate the financial services industry. These are the bodies that decide on forex regulations; you must therefore make sure that your forex broker is licensed in the country from which they operate. To get a detailed list of regulatory bodies in different countries go the forex regulatory organizations.

Forex Regulations for providers of Currency Trading services:

• A forex broker (online or offline) should be licensed in the country in which their operations are based. This is mandatory according to forex regulation. So look out for, brokers running operations from one place and regulated in another. It is against the law.

• Approval by the national regulatory bodies proves legitimacy of operations and ensures that the broker is maintaining strict quality control standards and that your money is in safe hands.

• Also, licensed forex brokers who operate under proper regulatory jurisdictions undergo periodical audits, reviews and evaluations which enforce their need to comply to industry standards.

• Regulation also stipulates that forex brokers must maintain enough funds to meet their customers’ needs of leverage.

• Regulatory bodies also ensure that forex brokers and service providers do not misrepresent information and encourage customers to execute a trade without informing the customer of the potential risks in the transactions. Brokers are not allowed to guarantee profits under any circumstance. Be cautious with such brokers.

• A Forex broker is obliged to honor each and every forex contract (position) opened by a client. Failure to complete the forex contract with a client will lead to the revoking of the broker’s license.

Forex Regulation 101 post from Forex Trading Blog

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