Since long time the world is governed mainly by currency transactions, foreign exchange and supply and demand, buying and selling operations.
The financial market has been the parameter of the global economy. In fact, about 2 trillion dollars are traded daily throughout the world.
Currently, thanks to the Internet growth, this big business can be done online through the Forex Market.
This platform allows you to operate 24 hours a day the seven days of the week.
The Forex market consists in buying and selling foreign currencies to generate profits between the currency exchange rates differences.
Fortunately we have different programs that advise us and help us carry out transactions quickly and efficiently.
If you want to maximize and enhance your profits here is the solution to invest in the stock market.
See for yourself the benefits that can be obtained with foreign exchange trading online.
First steps to start trading foreign currencies.
The first step is to open a demo account in wich you will able to practice and to then operate in the real market. In the demo account you will find quotations of the currencies in real time, updated every minute. Once this practice period is completed you can begin to buy foreign exchange without losing sight of what is happening in the global economy, since the data and reports spread that financial institutions will be one of yours unconditional allies to take decisions and buy currencies.
How is forex marketaffected by the present situation? In the forex world, wholesalers and retaileres investores panicks every time they hear the lightning of a storm that is about to explode.
The forex currency market, isn´t an island that is exempt from the global economy´s crisis, however this is a market where some currencies have been favored with the dollar´s fall.
The euro is a currency that continues to surprise forex marketoperators, as it crossed the psychological barrier level reaching contributions to $ 1.53 per euro. This upward trend seems to have no intention to go backwards, despite the fact that the projections pose an unhappy picture for the currency of the old continent.
The rebound of the euro against the dollar is due to several reasons: the prospect of recession in the United States, forecasts of further cuts by the Fed that threatens to bring the interest rate to 2.75% and the anti-inflation stance of Trichet that refuses to lower the cost of money which is currently in a 4%.
Currently the cut in the ECB’s interest rate depends on the cost of a barrel of crude. Jean Claude Trichet, ECB president, assured last year that when the euro was around 1.4960, with a barrel of crude above 100 dollars, he wasn´t thinking about lower rates at all.
The forex market investors expect that this position is maintained and that a cut in rates mean a devaluation of the currency of the old continent and this would lower the margins of profit. At the moment we should not expect any changes at the Forex market since the oil barrel is quoting above 100 dollars and promises to continue raising.
What is stagflation? This word was invented by an American senator who combined the words stagnation and inflation.
When there is a phenomenon of stagflation, as is nowadays case, economists insist that the solution is creating money and lower interest rates to encourage growth, thereby creating more jobs and demand for products return to normal levels.
In this scenario of “stagflation”, investing in foreign currencies has become an option resisted by investors who distrust the viability of this market. The experts believe that when there is inflation, a part of society will have to pay the cost because of the increasing prices, which will be produced by this worldwide-spreading phenomenon.
Nowadays, money´s value has fallen due to the collapse of the dollar, this has caused a domino effect in some currencies that have flatly lowered their quote.
Which are the most profitable investment options in this scenario? Investing in currencies nowadays is a good option, the problem is that traditional currencies are not paying the way they did before, which does not mean that forex marketis unprofitable. For example, the Japanese Yen and Swiss Franc were one of the peers who most benefited from the decline in the dollar and the euro.
Many investors have chosen to invest in commodities until forex stabilizes and invest again in currencies, as they did prior to the mortgage crisis suffered in the United States.
Investing in currencies is now a profitable option, you have to know how to take advantage of the abrupt movement that the markets are experiencing, and be attentive to the currencies quotes that before were not the stars currencies.
His name was Leonardo of Pisa,and he lived in the city with his name from year 1170 to 1250, year when he died. He was popularly known as Fibonacci, and he was son of Guglielmo Bonacci, who worked as a representant in the North of Africa for the most important italian´s commercial company.
While developing his commercial activities with his father, Fibonacci studied mathematics in the city of Bugia, nowadays called Bejaia, a port city located in the noreast of Argelia.
Fibonacci turned himself into a specialist in arithmetics, fact that took him to develop an hypothesis, that afterwards was baptized as “Fibonacci´s theory”.
It was in the year 1200 when Leonardo Fibonacci returned to his hometown and began to translate his ideas into books which were not well known at that time because the printing press had not yet been invented.
By the year 1225 Fibonacci was recognized as a great mathematical and his popularity grew by huge steps and many european corts requested advice to this young number specialist.
The Theory of Fibonacci explains the development of natural phenomena through a sequence of numbers that was popularly known as the divine proportion. The numbers showed that Fibonacci´s sequence could manifest in the evolution of a natural phenomenon, as the solution to a problem based on the mathematical process of reproduction of a pair of rabbits was confirmed.
The Theory of fibonacci has not only been used to anticipate the behavior of nature but is also frequently used in the world of foreign exchange which will anticipate the market movements. The Fibonacci numbers is a tool to assist the investor not to suffer losses that endanger his economy.
How does the American recession affect the quote of the world currencies? The stability of the currency depends on many factors that respond to issues of internal economic policy, and also to external variants that influence the price of international currencies.
The first symptom that put investors in alert about a possible recession in USA was the drop in the stock quotation of the shares and the collapse of its currency, the dollar, which for fifty years maintained its domination against it´s pairs of other countries.
The subprime crisis unleashed in the United States in mid-2007 as a result of non-payment of high risk mortgages, resulted in the fall of economic activity in North America. This put on alert the monetary authorities of the northern giant and the market intervened to lower the rate of interest in a phased manner to avoid arriving at a scene of recession, bring it up to a 3.25%.
The fall of the dollar pushed up the quote of world currencies, specialists believe that the rise in the prices of these currencies, which are trading in forex should be purely and exclusively to the depreciation of the dollar and the climate of recession in the world’s largest economy.
The quote of the euro has not stopped climbing since the green bill began to fall steadily. The Japanese yen is another currency that have shortened it´s difference in the exchange rate regarding the dollar, but this situation concerns the Japanese authorities, as the cheap yen was one of the engines driving the Japanese economy. Nowadays, Japanese exports are suffering as a result of possible recession in America and the demand for products has diminished.
On the other hand sterling pound opted to follow the path of the United States, and dropped the cost of money to 5.25%. The devaluation of the real currency has been minimal and changes in the interest rate didn´t made the pocket of the population suffer, the sterling pound continued carrying a large advantage, and is one of the major options that the investor has to form his pair Forex market.