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Tuesday, March 24, 2015

Gold and Currency Relationship

Gold is one of the most widely discussed metals due to its prominent role in both the investment and consumer world. Gold was also used as the world reserve currency up through most of the 20th century. Even though gold is no longer used as a primary form of currency in developed nations, it continues to have a strong impact on the value of those currencies. Moreover, there is a strong correlation between its value and the strength of currencies trading on foreign exchanges.

Financial markets price movement prediction is basis of successful trading. And Experienced traders know, that trading the currency market requires not only knowledge of the forex area. Currency price movement depends not only on macroeconomic developments and other economic news, but also from other financial instruments movement.Trader, knowing that the currency with which the market is concerned, can predict some of the forex market movements before they happen.

It is undeniably true that the price of gold is related to the value of the currency, so it is essential to understand how this association has come about and exactly how the currency influences the commodities markets if you are considering making an investment in gold. Understanding how the relationship between the currency and the price of gold works can help you to make the most advantageous investment decisions.

The traditional logic here is that during times of economic unrest, investors tend to dump the greenback in favor of gold.Unlike other assets, gold maintains its intrinsic value or rather, its natural shine.Investors generally buy gold as a way of diversifying risk. The gold market is subject to speculation as are other markets, especially through the use of futures contracts and derivatives. Gold price has shown a long term correlation with the price of crude oil. This suggests a reason why gold is sold off during economic weakness.

Gold prices are often used to measure the value of a local currency, but there are exceptions. Many people mistakenly use gold as a definitive proxy for valuing a country's currency. Although there is undoubtedly a relationship between gold prices and the value of a fiat currency, it is not always an inverse relationship as many people assume.

if there is high demand from an industry that requires gold for production, this will cause gold prices to rise. But this will say nothing about the local currency, which may very well be highly valued at the same time. Thus, while the price of gold can often be used as a reflection of the value of the U.S. dollar, conditions need to be analyzed to determine if an inverse relationship is indeed appropriate.

This information provided by OrientFinancial Brokers (OFB), licensed and regulated by Central Bank of the UAE since 1997, to conduct brokerage in Foreign ExchangeCommodities and Money Markets. OFB offers 24 hours internet on-line trading service to deal in thousands of financial instruments such as Commodities,TreasuriesShare CFDsStock Index CFDs, Foreign Exchange and PreciousMetals through its principals.

Tuesday, February 24, 2015

A Successful Forex Trader

Most people who are dealing with Forex trading have lack of knowledge and experience about the processes and procedures related to currency trading. The lack of experiences force them will often ultimately open another live account, and experience a little more success. In most cases, the trading will be end as not profitable for them.

To become a successful Forex trader is not a easy job compare to those other professions. The expert has to acquire an adequate knowledge regarding the currency trading.  Now a days, the currency trading is not a difficult task for new comers as there are structured, formal training available for all levels from beginners to expert Forex traders, unless you start your carrier by working for a professional institution like a foreign exchange bank, which is not an option for most retail Forex traders.

The Forex industry has established this as a custom for what is needed to get on with your trading and they market it as being sufficient to acquire success.   There's nothing exceptionally risky or hard about the  forex market in comparison to any other trade market; currencies usually don't go to zero, and the unleveraged account is actually in no danger at all of being wiped out under normal conditions. Currencies are the basic structure of all kinds of economic activity; big profits are possible in the forex market.

This information provided by OrientFinancial Brokers (OFB), licensed and regulated by Central Bank of the UAE since 1997, to conduct brokerage in Foreign ExchangeCommodities and Money Markets. OFB offers 24 hours internet on-line trading service to deal in thousands of financial instruments such as Commodities,TreasuriesShare CFDsStock Index CFDs, Foreign Exchange and PreciousMetals through its principals.

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Thursday, January 15, 2015

A Forex Trader Enjoys Advantages Only

Thanks for the lack of centralized exchanges and regulatory bodies, forex traders definitely enjoys much more freedom in trading than stock, options, futures and fund traders. Most of these privileges are only available in the world forex market. Some of the most important advantages are given below.
  • There is no difference in going short or long. Every trade is shorting a currency and going long on another. Hence no uptick or similar rules are applicable.
  • Traders can adopt any style they prefer; can practice any strategy on minute, hourly or weekly charts.
  • Customizable leverage options allow traders to trade both aggressive and conservative based on their trading strategy, market performance and trading goal.
  • Automated margin calls lock the loss to the money you put in.
  • There are no trading commissions hence the loss or gain of every trade can be accounted as traders profit or loss. Also when trading high interest rate difference currencies, traders can receive interest on daily basis.
  • The market stays very liquid round the clock. And there is a great information flow; traders can enjoy real-time news, charts, research and analysis usually for free.

This blog post is written for Orient Finance Broker, offering online forex trading services to middle-east traders. OFB offer a range of advantages for online traders.

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Thursday, October 16, 2014

How Volatility Affect Investment Returns?

Volatility is one of the most noticeable characteristic of any financial market. Actually, volatility is one of the main factors which determine the profitability and popularity of an instrument or a market. It is defined as the deviation or dispersion of the price of a product or value of an index from the mean value. Volatility is usually measured using standard deviation. The value changes of the instrument or index is grouped and plotted using moving average. The standard deviation is small when there is low volatility and is large when there is high volatility.

Intraday price volatility affect short term traders and scalpers and long-term price volatility affects position traders and investors. Researches shows that volatility affects market performance. Generally, in rising markets have relatively low volatility and declining markets have higher volatility. Volatility is also directly proportional to risk. The overall return from the market also declines when the market is volatile.

The fact that price volatility is influenced by lot of factors in addition to the supply-demand. Some common factors include interest rate changes, oil price changes, inflation trends, industry or company or market performance reports, and economic policy changes.

This blog is published for Orient Financial Brokerage Services, the leading UAE based online forex, CFD, Gold and Commodity broker with a range of investment account features for middle-east traders.

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Tuesday, September 16, 2014

Why Forex Trading is a Good Profession?

Forex market the world's biggest financial market where trillions of dollar worth transactions took place in one day. It is also one of the favorite professions for new graduates and capital market players. There are many things which makes forex trading a good profession.
  1. There are still room for players: unlike other capital markets, world forex market is not much exploited by retail traders. Only a small portion of trades are carried out by retail traders. The volume of individual players is also much less than the banking counterpart.
  2. World currency market is one of the most liquid and diversified market. Careful placing of traders can help traders to overcome almost all financial disasters including inflation, low economic growth, oil or commodity price changes, etc. Moreover currency market do not show any significant co-relation to any other markets.
  3. When compared to trading other financial instruments, forex trading has much related rules and requirements. Usually the traders are straight forward and the trading platform is free. There are no short-sale limits, market regulators or specific trading hours.
  4. Unlike trading other financial instruments beginner forex traders have very vast resources to learn trading. There are lots of online forums and communities available, many sites provide free and paid market analysis and the free software trails help to test the trading strategies.

Although easier than most financial instruments trading, forex trading does not guarantee any better returns. The success depends on trader’s ability, trading strategies and many related things.

This blog is published for Orient Financial Brokers, a popular online forex trading brokerage firm in Dubai, UAE.

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