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Mar 16
Forex Blog
Euro Printing Sunday Worst Since January ...

The euro on Friday posted the biggest weekly loss against the dollar since January and further losses seen as a possibility, such as debt worries resurfaced after a German news report, later denied, showed Greece has raised the possibility of leaving the euro zone.

In late afternoon New York trading, the euro traded lower at $ 1.43480, down 1.3 percent on the day, retreating from 17-month peak of $ 1.49404 on Wednesday. With the decline of 3.3 percent for the week, the euro was at a phase for the worst week against the dollar since January.

 
More Australians investing in shares

According to the  ASX research. Percentage of adult population who are shareholders

USA - 45%
Australia - 43%
Hong Kong - 35%
New Zealand - 23%
Switzerland - 21%
UK - 18%
Sweden - 17%
Germany - 13%

Source: ASX

 

 

 

Is Osama really died?


This is the Million dollar question these days in the people mind. What happened in Abbottabad, Pakistan? According to Media Osama died in this military operation. He lived with her 2 wife’s and 4 children. In this operation Osama and his three children has been died and his wife’s and daughters were arrested. US Media published a snap of Osama dead face.

Lets analyze the picture clearly so that you can know whether Osama is died in this operation or still alive.

Here you can see three pictures.

Osama pictures


1)    Osama old picture
2)    A person who was died in this operation.
3)    A picture showed by US Millitary to media.

Now, analyze the picture carefully. Do you think picture no 2 is Osama picture? If not then we will show you how all three pictures links each other.

 

1) See lips of  Pic 1 and Pic 3, don’t you think both picture has same lips structure? Its shows that’s both picture are same from this area? Yes you are absolutely right.

2) See beard of Pic 1 and Pic 3. The same amount of beard is white. Its means, Osama looks same age in Pic 1 (1999) and Pic 3 (2011) Wow I want to be same till 12 year. According to science, human beard whiteness increase with age. But in picture three the amount of white beard is less.

3) The amount of face stretch is same in Pic 1 and Pic 3. According to forensic science human face can never be stretch after death. But the picture shows.

4) Lets talk about picture 2. The upper part of face in Pic 2 and Pic 3 are same.

At the end this was a great work of editing to shows people that Osama is died. After watching this picture I am sure you changed your mind. The picture is fake and made by editing of two pictures.

 

FOREX, A Trending Market

During the long week of trading in Forex market, high volume of transactions occurs at high liquidity which is a source of fame for the market. These features have enabled the market to be the trendy market with a very few off track periods.

But what can a forex trader extract from it? Often, this trendy feature of the currency market means that there will be some good healthy number of chances for the trader to earn high profits during a particular day.

 

Forex: Why Psychiatrists Make Better Traders Than

 

Expert Economists?

It has been seen that millionaire traders such as Elder, William and some other are professional psychiatrists. This cannot be said as coincidence that the main market leaders are not the economic experts but they are psychiatrists or psychotherapists. All you have to do to become successful is to know why it happens with forex. This will enable you to point out your mistakes and once you point them out you will definitely move towards correction. When you correct these mistakes eventually you will become a trader having no psychological barriers in the way to better earnings in forex.

 

Currency Trading Tips! Get Rich!

By ForexTradingEVO.com

What is being sold in the currency market? The answer to question is simply nothing because the market works upon speculation and no physical exchange of currency takes place. The trades are saved in a computer and are sold out upon market prices. The accounts operating in dollars use dollar as the default currency to record profit and losses.

 
Strategic Chart

Strategic Chart
Doing business in forex trading you need some preplanned forex strategy before you attempt to venture any trade. When you observe for the very first time the forex strategy chart, the question comes to your mind that what it is all about, what are the numbers and how one can gain from it.
You must have several strategies in your mind, while forex trading. Each trader works with his own strategy whenever they execute a trade. Without any strategy it would be like a gambling, just anticipating good luck to help you.
Planning for forex trading strategy is like risk management strategy where you plan before entering any specific business.
Forex strategy chart is an ideal alternative for those who have a full time employment. Clearly, day trading is not an option when you’re at work. That is why trading off daily chart is such a great technique. It permits a chance for people desiring to trade full time the chance to slowly build a huge equity base after job work hours.
From EOD candles forex daily strategy usually takes signals.  In this case an “end of day” candle is what EOD stands. These candles are formed when the Japan trading session begins and the New York session ends. The general rule of the thumb is that the 5 pm Eastern hour is where every day candle opens and closes, although these time frames may fluctuate which depends on the location of your broker.
Like any other timeframe the daily candles can also be traded. You can employ a trend trading approach, or an investor method. You can only target daily reversal candles if you want. In fact it  does not matter, as the big number of all trading systems can be successfully applied throughout all charts. You simply need to set your risk parameters by setting your order accordingly, and you are all set. To find setup charts it literally takes around ten to fifteen minutes.
Advantage of using a forex trading chart strategy is that there is much less price cut that is usually referred as consolidation periods are cut in price.  If you view a 5 minute chart, it is mostly seen as untidy the price patterns can be. Price moves much smoother on daily chart.  Similarly it applies to any higher timeframe chart. For price movement forecasts, normally anything over 4 hours chart is generally regarded more precise for the purpose.
With most of the timeframes, each and everyday offer an abundance of chances. There are various strategies that can be employed to make uniform gains, while trading daily candles, it also helps to find out which system to avoid. Before trading of any kind, a solid strategy must have an established record of profitability.  To learn these profitable techniques, one needs time and discipline. One acquired, a learned can go a very long way to make unlimited profits for a long period of time.

Doing business in forex trading you need some preplanned forex strategy before you attempt to venture any trade. When you observe for the very first time the forex strategy chart, the question comes to your mind that what it is all about, what are the numbers and how one can gain from it.

You must have several strategies in your mind, while forex trading. Each trader works with his own strategy whenever they execute a trade. Without any strategy it would be like a gambling, just anticipating good luck to help you.

Planning for forex trading strategy is like risk management strategy where you plan before entering any specific business.

Forex strategy chart is an ideal alternative for those who have a full time employment. Clearly, day trading is not an option when you’re at work. That is why trading off daily chart is such a great technique. It permits a chance for people desiring to trade full time the chance to slowly build a huge equity base after job work hours.

From EOD candles forex daily strategy usually takes signals.  In this case an “end of day” candle is what EOD stands. These candles are formed when the Japan trading session begins and the New York session ends. The general rule of the thumb is that the 5 pm Eastern hour is where every day candle opens and closes, although these time frames may fluctuate which depends on the location of your broker.

Like any other timeframe the daily candles can also be traded. You can employ a trend trading approach, or an investor method. You can only target daily reversal candles if you want. In fact it  does not matter, as the big number of all trading systems can be successfully applied throughout all charts. You simply need to set your risk parameters by setting your order accordingly, and you are all set. To find setup charts it literally takes around ten to fifteen minutes. 

 
Robotic trading software

 

It is possible to increases your chances of placing winning trades when you put your robotic forex trading to benefit you in your trading strategy. Robotic forex trading is a way for you to continue trading while you are far from your computer. It will give you profit while you are asleep and not in front of your computer.
The forex market is a 24/7 market and currency prices may change any time. It is not possible for any individual to monitor those fluctuations every moment of the day. Here the robotic software can completely change the way you use to trade and take you the to higher level
Robotic trading software can examine the changes in pricing of multiple currencies at a time, while tracking the charts and examining any small variations to describe potential trends that can show a winning trade. You can also use software to work in conjunction with your trading account
Your software will consistently track price changes, once you placed buy trade. When it recognized that the trend is going to end now and the trend could be downwards, then it places a sell trade to close your position in a secure way.
The robotic forex trading system shows that you have a powerful assistance who is working twenty four hour in your trading strategy. You don’t have to be sitting for hour to track and analyze price changes on your own, it will save a plenty of time for you.
You have to be sure that your broker gives you access to streaming prices because your robotic forex trading software needs update price data in order to make right choices when it does your trade. If you come to know that your broking account is on a 15 minutes delay in pricing, then this is sufficient time for prices to be changed that shows that your robotic software will soon be running on outdated data and the chances are that it will not be making as much profit for you as it potentially could.
Your robotic software should find ways to directly integrate into your trading program easily, and let you to set your trade tolerance limits of your own with the click of a button. You can set stop loss limits and can also set price point trades that can permit your software to lower your losses and earn profits for you.
When you are looking for the correct system to use with your foreign currency trading, be certain to find the one that is capable of simultaneously monitoring and analyzing multiple currencies.  Find the system that permits you to trade with the seven major currencies.
Online forex trade has brought rapid access of the market to new as well as experienced forex traders.  Today this is the technology that forex markets rely on. The computers have become very valuable business tool today. Whether you are a new or a seasoned professional, just get online and start trading in currency.

It is possible to increases your chances of placing winning trades when you put your robotic forex trading to benefit you in your trading strategy. Robotic forex trading is a way for you to continue trading while you are far from your computer. It will give you profit while you are asleep and not in front of your computer.

The forex market is a 24/7 market and currency prices may change any time. It is not possible for any individual to monitor those fluctuations every moment of the day. Here the robotic software can completely change the way you use to trade and take you the to higher level

Robotic trading software can examine the changes in pricing of multiple currencies at a time, while tracking the charts and examining any small variations to describe potential trends that can show a winning trade. You can also use software to work in conjunction with your trading account

Your software will consistently track price changes, once you placed buy trade. When it recognized that the trend is going to end now and the trend could be downwards, then it places a sell trade to close your position in a secure way.

The robotic forex trading system shows that you have a powerful assistance who is working twenty four hour in your trading strategy. You don’t have to be sitting for hour to track and analyze price changes on your own, it will save a plenty of time for you.

You have to be sure that your broker gives you access to streaming prices because your robotic forex trading software needs update price data in order to make right choices when it does your trade. If you come to know that your broking account is on a 15 minutes delay in pricing, then this is sufficient time for prices to be changed that shows that your robotic software will soon be running on outdated data and the chances are that it will not be making as much profit for you as it potentially could.

Your robotic software should find ways to directly integrate into your trading program easily, and let you to set your trade tolerance limits of your own with the click of a button. You can set stop loss limits and can also set price point trades that can permit your software to lower your losses and earn profits for you.

 
Forex Chart Softwares

In the market, there are many forex charting programs and application software available.  More or less, all of them do the same job with some degrees of variation in proficiency.
Following is the summary of few major charting software.
John Bollinger designed software for Forex charts. It is available on BBForex.com website it is the first one that is solely dedicated to providing Forex charts.
It is user friendly, it has both basic as well as advanced charts powered by Flash; it is structured in such a matter that it can generate compound data, history charts and alerts.  Based on John Bollinger method, it offers complete tutorial on the technical analysis. This package is ideal for traders who used Bollinger Banks technical analysis for forex trading.
Stratagem- this package has 14 technical indicators, 7 different time frames, and a capability of multiple-chart viewing. It has a menu bar and very easy to use. It permits the user to generate common charting action with a click of the mouse. It is user friendly and provides the trader enough room to tailor his work spaces according to his own requirements.  User is free to title and organize his work spaces that suits him. This package includes exportable data as well as real time data feed. It consists of three different type of charts and printing facility.
FXtrek – it is a free package and very well organized starter kid for the inexperienced forex trader; simple for a beginner to understand and also sophisticated to tackle the ever growing business needs as the user gets more knowledgeable with his business transactions. The package has 7 indicators, 3 different types of chart and actual time forex information.  The charts setup is a famous time frame with tick and 1 minute options. It employs the most common indicators.
Chartstation – it consists of 13 time’s frame, 21 indicators and some other useful features that are not available in other free packages. It is more sophisticated Forex signals package and is suitable for professionals who are doing more advanced trading. This package uses only one window but is capable of facilitating user’s work and titles with as many charts as he requires, also helps him to trace the pattern and trends of multiple currencies with multiple time frames.
Metatrader 4- It has the capability of awful amount of data, with massive spread of technical indicators and time frames.  It can provide sufficient space to the user to examine and explain the market patterns according to his personal choice. A user has a freedom to enter /exit trades when he finds fit with computer generated trade packages. The most amazing feature of this package is the built in language for programming individuals.
All these packages are free of cost, but market is full of such software. First a user should asses his skill and requirement and then goes for any such package.

In the market, there are many forex charting programs and application software available.  More or less, all of them do the same job with some degrees of variation in proficiency.

Following is the summary of few major charting software.

John Bollinger designed software for Forex charts. It is available on BBForex.com website it is the first one that is solely dedicated to providing Forex charts.

It is user friendly, it has both basic as well as advanced charts powered by Flash; it is structured in such a matter that it can generate compound data, history charts and alerts.  Based on John Bollinger method, it offers complete tutorial on the technical analysis. This package is ideal for traders who used Bollinger Banks technical analysis for forex trading.

Stratagem- this package has 14 technical indicators, 7 different time frames, and a capability of multiple-chart viewing. It has a menu bar and very easy to use. It permits the user to generate common charting action with a click of the mouse. It is user friendly and provides the trader enough room to tailor his work spaces according to his own requirements.  User is free to title and organize his work spaces that suits him. This package includes exportable data as well as real time data feed. It consists of three different type of charts and printing facility.

FXtrek – it is a free package and very well organized starter kid for the inexperienced forex trader; simple for a beginner to understand and also sophisticated to tackle the ever growing business needs as the user gets more knowledgeable with his business transactions. The package has 7 indicators, 3 different types of chart and actual time forex information.  The charts setup is a famous time frame with tick and 1 minute options. It employs the most common indicators.

Chartstation – it consists of 13 time’s frame, 21 indicators and some other useful features that are not available in other free packages. It is more sophisticated Forex signals package and is suitable for professionals who are doing more advanced trading. This package uses only one window but is capable of facilitating user’s work and titles with as many charts as he requires, also helps him to trace the pattern and trends of multiple currencies with multiple time frames. 

 
Forex Trading Information

 

The forex market is the largest financial market in the world today, trading nearly $3 trillion in transaction every day. The internet has increased its capacity to trade and has opened up forex to an even bigger community of home based traders.  Entering a forex trading is easy, opening of an account is simple and money can be deposited into an account in a fairly short span of time.
But by having broker accounts full of funds and an excellent platform for trading is not enough.  Still for trading in forex one has to have a system to execute trades and be trained and disciplined when to cut a loss or take a profit.
To have some experience in forex trading you need a group of experienced individuals.. To gain some experience in forex trading there you need group environment within a forex trading room. Such trading rooms have recently sprung up. In these live trading rooms you suppose to listen to those experts who have had a lot more runs up on the board than you have, but learning never stops and you should keep reading and researching about the forex market and trading. The forex trading room will reduce your time it takes to get up and running in the forex trading market.
Live forex trading rooms provide excellent platform for new traders. It provides complete knowledge of the trade from execution of the trade to exit money management.  It trains individuals in such a way so that they set the tone for the future trade rather than they lose money, when they do real trading.
Live trading rooms are just like a course on a day to day basis.
There are many benefits in a live day trading room.
1. You get “hands on“from a live and experienced trader that increases your knowledge of the trade. Your learning will rise a lot faster than by studying cd’s and books.
2.  You are in the live market, as its happening acquiring actual world experience and guidance.
3. It helps to increase discipline.  Gives a level of coaching that goes through a process, it may be a trading strategy, money management on entry, which is usually overlooked and considered insignificant as a new trader.
If you want to investigate a live trading room service than you have to be sure to compare the other room features as well, apart from trading style.  There are rooms that offer free trial service and by using it you can easily select the market that suits your style without investing a dime. There are rooms using Google search, which offer trial period of up to 2 weeks for free.
Equipment requirement for live trading room is not so much. You only need a standard computer and operating system you can understand various concepts of forex trading from your PC. As you already know that live trading rooms provide the opportunity to sit besides a live coach, which was not possible previously.

The forex market is the largest financial market in the world today, trading nearly $3 trillion in transaction every day. The internet has increased its capacity to trade and has opened up forex to an even bigger community of home based traders.  Entering a forex trading is easy, opening of an account is simple and money can be deposited into an account in a fairly short span of time.

But by having broker accounts full of funds and an excellent platform for trading is not enough.  Still for trading in forex one has to have a system to execute trades and be trained and disciplined when to cut a loss or take a profit.

To have some experience in forex trading you need a group of experienced individuals.. To gain some experience in forex trading there you need group environment within a forex trading room. Such trading rooms have recently sprung up. In these live trading rooms you suppose to listen to those experts who have had a lot more runs up on the board than you have, but learning never stops and you should keep reading and researching about the forex market and trading. The forex trading room will reduce your time it takes to get up and running in the forex trading market.

Live forex trading rooms provide excellent platform for new traders. It provides complete knowledge of the trade from execution of the trade to exit money management.  It trains individuals in such a way so that they set the tone for the future trade rather than they lose money, when they do real trading.

Live trading rooms are just like a course on a day to day basis.

There are many benefits in a live day trading room.

1. You get “hands on“from a live and experienced trader that increases your knowledge of the trade. Your learning will rise a lot faster than by studying cd’s and books.

2.  You are in the live market, as its happening acquiring actual world experience and guidance.

3. It helps to increase discipline.  Gives a level of coaching that goes through a process, it may be a trading strategy, money management on entry, which is usually overlooked and considered insignificant as a new trader.

If you want to investigate a live trading room service than you have to be sure to compare the other room features as well, apart from trading style.  There are rooms that offer free trial service and by using it you can easily select the market that suits your style without investing a dime. There are rooms using Google search, which offer trial period of up to 2 weeks for free.

 
Importance of Forex News in Forex Trading
Tuesday, 25 January 2011 18:33

 

Are you going to invest in Forex Market or are dealing with Forex market? Then you are really in need to keep yourself up to date about Forex news.
Remember your money is like the seed you sow and the quote “As you sow so shall you reap” best suits you. As an investor you are like a farmer. What if the farmer does not have knowledge about the weather conditions and which crop is in demand how can he hope to get the maximum profit. Similar is the case with the Forex market dealers/Traders. You cannot hope to earn maximum profit if you don’t keep yourself informed about the fluctuations of the Forex market. Suppose if you come to know that the US dollar rate is not going to rise while the Japanese Yen has reached its highest value of the past will you invest your money by buying the US Dollar.
So, this article is for you if you are going to invest your money in Forex market or your previous investment has been subjected to loss and you want to compensate it.
The situation of the Forex Market, back in 2010 shows that UK Pound Forex rate remained down against Euro and US Dollar.US Dollar was subjected to decline. As a result Investors showed more interested in Australian and Canadian Dollar for investment. Also Japanese Yen back in 20101 reached its 15 year high value against US dollar .US Dollar index reached its lowest point of the year in 2010 showing that investors are finding other currencies safer for investment.
But the predictions for 2011are that US Dollar will regain its value and it will be a safe investment. The uncertainty of European and Japanese markets and much slow growth rate of them is also causing investors to buy US dollar.
Japanese Yen which has reached high value is predicted to lose some ground which may be a cause frustration for some traders.
Canadian dollar is expected to gin value as the oil prices are likely to rise in 2011. Moreover the rise in the prices of not only oil and gas but also in the commodities such as wheat and soybean will continue rising and the exporting countries are expected to have a stable value of their currencies.
Australian Economy which is in a boost due to low unemployment and inflation is said to have its dollar beating all the other European currencies yet it will not be able to overcome US Dollar.

Are you going to invest in Forex Market or are dealing with Forex market? Then you are really in need to keep yourself up to date about Forex news.

Remember your money is like the seed you sow and the quote “As you sow so shall you reap” best suits you. As an investor you are like a farmer. What if the farmer does not have knowledge about the weather conditions and which crop is in demand how can he hope to get the maximum profit. Similar is the case with the Forex market dealers/Traders. You cannot hope to earn maximum profit if you don’t keep yourself informed about the fluctuations of the Forex market. Suppose if you come to know that the US dollar rate is not going to rise while the Japanese Yen has reached its highest value of the past will you invest your money by buying the US Dollar.

So, this article is for you if you are going to invest your money in Forex market or your previous investment has been subjected to loss and you want to compensate it.

The situation of the Forex Market, back in 2010 shows that UK Pound Forex rate remained down against Euro and US Dollar.US Dollar was subjected to decline. As a result Investors showed more interested in Australian and Canadian Dollar for investment. Also Japanese Yen back in 20101 reached its 15 year high value against US dollar .US Dollar index reached its lowest point of the year in 2010 showing that investors are finding other currencies safer for investment.

 
Forex Market: Who Creates the Forces That Shape the Real Time Market?
Friday, 07 January 2011 18:36

 

The foreign exchange market is massive, $3.2 trillion in daily volume, all over the world, 24X7, beginning in New Zealand on Monday morning and ending at the close of business on Friday in Asia.  The market is highly decentralized with regulation pertaining only to domestic policies and jurisdictions.  It is a highly electronic over-the-counter market where large global banks control 50% of the action with their internal “Interbank” trades.  With global exports at roughly $12 trillion annually, what constitutes the other 98.5% of the transaction volume?
Due to its shear size, no single investor or governmental body can effectively manipulate the forex market.  Central banks will occasionally intervene to stabilize their respective domestic currencies, but psychological factors are more at work in these instances than the weight of central bank buying or selling.  For exotic currency pairs where volume is a distinct issue, manipulation may be more possible, but the misadventures of hedge funds to profit on lightly traded currencies have drawn enough scorn from finance officials that the practice today remains at levels below obvious detection.
The forex market is highly volatile, due to the ebb and flow of market forces that react to the least bit of economic news.  For fx trading, volatility is a requisite for profitable trading opportunities.  As long as a market goes up and down in wave-like patterns, there are strategies that will produce gains, along with losses that must also be accommodated.  For these reasons, analysts often quote that 75% of the volume in the forex market is speculation, the practice of dealing in high-risk transactions for quick and/or considerable profit.
If banks constitute 50% of the market, then they, too, by inference are also speculating much of the time.  Global banks support the needs of their global clients, but they are also in a position to profit handsomely from “carry trade” activity.  With offices in many countries around the globe, a bank can easily take funds from a low-interest environment and direct them to investments where interest rates are higher and business growth more dynamic.  For the past decade, banks have shifted enormous amounts of capital to emerging countries, especially China and India, and to countries that support these giants, like Australia.  Interest rate differentials and currency appreciation have filled their coffers and benefited their shareholders nicely, if they were also wise enough to avoid mortgage-backed securities.
The customers of banks are involved in international trade.  They need various forex “tools” to fund foreign operations, pay for raw materials, and consummate sales in regions other than their native countries.  Treasurers for these companies must also hedge their foreign exchange risk and require tools for this exercise also.  Banks profit handsomely from this direct forex support business channel.
The 50% of traffic outside of banks can then be inferred to result from speculation, although a good portion of this activity has to do with risk management, either locking in a particular gain or protecting one’s downside from an adverse movement in the market.  As mentioned above, many large and well-capitalized hedge funds have given speculation a bad reputation.  However, much of this capital flow, which translates into supply and demand forces in the market, contributes to exposing basic flaws in economic policy and rectifying untenable positions in global commerce.  Exchange rates represent a focal point between competing economies, and speculation leads to more liquidity and efficient pricing in the long run.
The forex market is enormous, but each participant has an important role to play to ensure that healthy market conditions continue.

The foreign exchange market is massive, $3.2 trillion in daily volume, all over the world, 24X7, beginning in New Zealand on Monday morning and ending at the close of business on Friday in Asia.  The market is highly decentralized with regulation pertaining only to domestic policies and jurisdictions.  It is a highly electronic over-the-counter market where large global banks control 50% of the action with their internal “Interbank” trades.  With global exports at roughly $12 trillion annually, what constitutes the other 98.5% of the transaction volume?

Due to its shear size, no single investor or governmental body can effectively manipulate the forex market.  Central banks will occasionally intervene to stabilize their respective domestic currencies, but psychological factors are more at work in these instances than the weight of central bank buying or selling.  For exotic currency pairs where volume is a distinct issue, manipulation may be more possible, but the misadventures of hedge funds to profit on lightly traded currencies have drawn enough scorn from finance officials that the practice today remains at levels below obvious detection.

The forex market is highly volatile, due to the ebb and flow of market forces that react to the least bit of economic news.  For fx trading, volatility is a requisite for profitable trading opportunities.  As long as a market goes up and down in wave-like patterns, there are strategies that will produce gains, along with losses that must also be accommodated.  For these reasons, analysts often quote that 75% of the volume in the forex market is speculation, the practice of dealing in high-risk transactions for quick and/or considerable profit.

If banks constitute 50% of the market, then they, too, by inference are also speculating much of the time.  Global banks support the needs of their global clients, but they are also in a position to profit handsomely from “carry trade” activity.  With offices in many countries around the globe, a bank can easily take funds from a low-interest environment and direct them to investments where interest rates are higher and business growth more dynamic.  For the past decade, banks have shifted enormous amounts of capital to emerging countries, especially China and India, and to countries that support these giants, like Australia.  Interest rate differentials and currency appreciation have filled their coffers and benefited their shareholders nicely, if they were also wise enough to avoid mortgage-backed securities.

The customers of banks are involved in international trade.  They need various forex “tools” to fund foreign operations, pay for raw materials, and consummate sales in regions other than their native countries.  Treasurers for these companies must also hedge their foreign exchange risk and require tools for this exercise also.  Banks profit handsomely from this direct forex support business channel.

The 50% of traffic outside of banks can then be inferred to result from speculation, although a good portion of this activity has to do with risk management, either locking in a particular gain or protecting one’s downside from an adverse movement in the market.  As mentioned above, many large and well-capitalized hedge funds have given speculation a bad reputation.  However, much of this capital flow, which translates into supply and demand forces in the market, contributes to exposing basic flaws in economic policy and rectifying untenable positions in global commerce.  Exchange rates represent a focal point between competing economies, and speculation leads to more liquidity and efficient pricing in the long run.