What is
Forex?
Forex refers to the over-the-counter
market where buyers and sellers conduct foreign exchange business by
telephone and other means of communication. It is also referred to as
foreign exchange market.
Most investors trade
in currency Futures and Options which are widely traded on regulated
exchanges. Though many currencies are traded in the forex and futures
markets, a good number of investors concentrate on currencies like
Japanese Yen, Euro, British Pound and Swiss Frank, to name a
few.
How do investors make money by
trading in foreign exchange markets?
Investors take
advantage of movements in foreign exchange rates in order to gain profits.
Below is a general description of trading outright futures contacts.
For instance, an
investor thinks that Euro currency can go higher due to certain
fundamental or
technical reasons which he/she believes will
play a vital role in moving markets. He/she then decides to buy one Euro
currency futures contract by placing an order through the brokerage
company that he/she is associated with. Let us assume the Euro currency
was bought at a rate of 1.2100, and the price rose to 1.2200 in a few days
time. He/she then decides to sell the futures contract at 1.2200. This
will fetch a profit of 100 points which will translate into an amount of
$1250.
At another occasion,
an investor thinks that the Euro currency can go down against dollar.
He/she then decides to sell one Euro currency futures contract. Let us
assume the Euro futures was sold at 1.2100, and the price dropped to
1.2000 in a few days time. This will result in a profit of 100 points.
In this way, investors make money
both in a rising and a falling market.
Click
here to see the historic
price movements of currency futures (daily, weekly and monthly data are
provided)
What will happen if prices move
against existing positions?
Unlike other
conventional investments, financial markets are characterised by a higher
risk element. Investors adopt
various risk management techniques to limit losses as well as to protect
profits. Futures traders also use options contracts to control their
exposure to risk. In other words, there exists a variety of trading
strategies and techniques which can be used to control one's exposure to
unfavourable price movements.
Where can I get currency price quotes
and market information?
Our clients can
receive real-time price quotes by phone 24 hours a day. Price quotes and
market information are made available on computer terminals at SFB's
office that are obtained from satellite-based quote vendors. In addition,
Internet based real time and daily price quotes are available on this
website for informational purposes.
Will SFB help beginners get
started trading?Yes we do. Our
experienced brokers and analysts will be by your side every day limiting
your risks and maximising your opportunities. In addition, beginners will
receive training that are arranged as trading workshops. Contact
SFB Research for beginners
package.
Also check out various investment options
that we are offering to beginners as well as to experienced
traders.
How should I go about opening a
trading account?Click here to request
account application materials.
Got a question?
It is likely that you will have many questions about investing in
financial markets. You will find answers in the FAQ Section.
Please be advised that apart from what has been
described above, investors use various other trading strategies
combining futures and options which are appropriate for different
market conditions. Click
here to go to Advanced Trading
Strategies. |
Also see:
Specifications of
Currency Futures
Advanced Trading
Strategies
