| |
forex investment Article
Below,
you'll find extensive information on leading forex investment articles
and products to help you on your way to success.
Forex-trading--calculating-profit-and-loss-in-foreign-currency-trading
By Gregory DeVictor
The foreign exchange market, or Forex market, is an around-the-clock cash market where the currencies of nations are bought and sold. Forex trading is always done in pairs. For example, you buy Euros, paying with U.S. Dollars, or you sell Canadian Dollars for Japanese Yen. The value of your Forex investment increases or decreases because of changes in the exchange rate or Forex rate. These changes can occur at any time, and often result from economic and political events. Using a hypothetical Forex investment, this article shows you how to calculate profit and loss in Forex trading.
To understand how the exchange rate can affect the value of your Forex investment, you need to learn how to read a Forex quote. Forex quotes are always expressed in pairs. In the following example, your pair of currencies are the U.S. Dollar (USD) and the Canadian Dollar (CAD). The Forex quote, USD/CAD = 170.50, means that one U.S. Dollar is equal to 170.50 Canadian Dollars. The to the left of the "/" (USD in this example) is referred to as base and its value is always 1. The to the right of the "/" (CAD in this example) is referred to as the counter currency. In this example, one USD can buy 170.50 CAD, because it is the stronger of the two currencies. The U.S. Dollar is regarded as the central of the Forex market, and it is always treated as the base in any Forex quote where it is one of the pairs.
Let's go now to our hypothetical Forex investment to show how you can profit or come up short in Forex trading. In this example, your pair of currencies are the U.S. Dollar and the Euro. The Forex rate of EUR/USD on August 26, 2003 was 1.0857, which means that one U.S. Dollar was equal to 1.0857 Euros, and was the weaker of the two currencies. If you had
Forex: Improved risk appetite hurts the Yen
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.nasdaq.com/newscontent/20100316/forex-improved-risk-appetite-hurts-the-yen.aspx?storyid=20100316_22728512-a040-4d7f-b038-f9287359bc1f_fxstreet.com" style="font-size:1.2em">Forex: Improved risk appetite hurts the Yen</a>
<br> <span style="color:#888888;">NASDAQ</span> - <span style="white-space:nowrap">34 minutes ago </span>
<div style="width:80%;">FXstreet.com (Barcelona) - The Japanese Yen has been the biggest loser of Tuesday's European session, with risk appetite improving and European markets going through gains, the Yen has lost most ...</div>
</div>
Pound Euro exchange rate: Tuesday review
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.economy-news.co.uk/pound-euro-exchange-rate-16201003.html" style="font-size:1.2em">Pound Euro exchange rate: Tuesday review</a>
<br> <span style="color:#888888;">Economy News</span> - <span style="white-space:nowrap">2 hours ago </span>
<div style="width:80%;">Pound Euro exchange rate is higher in morning trade as the British Pound looks to keep its head above water in an investment climate that remains skeptical to the UK currency. The GBPEUR rate is 0 ...</div>
</div>
Euro Volatility Likely on German ZEW Survey, EU FinMin Summit Outcome
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2010-03-16-0458-Euro_Volatility_Likely_on_German.html" style="font-size:1.2em">Euro Volatility Likely on German ZEW Survey, EU FinMin Summit Outcome</a>
<br> <span style="color:#888888;">Daily FX</span> - <span style="white-space:nowrap">8 hours ago </span>
<div style="width:80%;">The Euro may see an outbreak of volatility as a survey of German investor confidence drops for the sixth consecutive month while EU finance ministers conclude a summit that promises to produce the ...</div>
<a href="http://www.france24.com/en/20100316-euro-creeps-higher-after-zew-survey">Euro creeps higher after ZEW survey</a> - <span style="color:#888888">France24</span><br>
<a href="http://www.forexpros.com/news/forex-news/forex---euro-soars-against-dollar-in-wake-of-zew-data-125777">Forex - Euro soars against dollar in wake of ZEW data</a> - <span style="color:#888888">Forex Pros</span><br>
</div>
Euro Falls on No Immediate Greek Backstop
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.fxstreet.com/technical/forex-strategy/daily-forex-strategy-briefing/2010-03-15.v02.html" style="font-size:1.2em">Euro Falls on No Immediate Greek Backstop</a>
<br> <span style="color:#888888;">FXstreet.com The Forex Market</span> - <span style="white-space:nowrap">13 hours ago </span>
<div style="width:80%;">by Hans Nilsson The dollar and yen rose on Monday ahead of Tuesday's Federal Open Market Committee policy meeting. Expected to maintain the fed funds target rate at a range of 0 to 0.25%, the Fed ...</div>
</div>
EUR/USD: Trading the Federal Open Market Committee Interest Rate Decision
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/trading_news_reports/2010-03-15-2002-EUR_USD__Trading_the_Federal_Open.html" style="font-size:1.2em">EUR/USD: Trading the Federal Open Market Committee Interest Rate Decision</a>
<br> <span style="color:#888888;">Daily FX</span> - <span style="white-space:nowrap">16 hours ago </span>
<div style="width:80%;">The Federal Open Market Committee is widely expected to hold the benchmark interest rate at 0.25% in March as the central bank aims to encourage a sustainable recovery in the world's largest ...</div>
</div>
European Currency Fund is ?long? perspective: Joaquín Almunia
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.focus-fen.net/index.php?id=n213260" style="font-size:1.2em">European Currency Fund is ?long? perspective: Joaquín Almunia</a>
<br> <span style="color:#888888;">Focus News</span> - <span style="white-space:nowrap">18 hours ago </span>
<div style="width:80%;">Madrid. Crisis fund for the saving of the economies of the countries from the Euro area can be a ?long? perspective, said EU Commissioner for Competition Joaquín Almunia, AFP reported. ?European ...</div>
</div>
Euro Edges Lower As Jobs Situation Remains Bleak
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.rttnews.com/Content/ForexTopStory.aspx?Node=B3&Id=1240625" style="font-size:1.2em">Euro Edges Lower As Jobs Situation Remains Bleak</a>
<br> <span style="color:#888888;">RTT News</span> - <span style="white-space:nowrap">20 hours ago </span>
<div style="width:80%;">(RTTNews) - The euro was back on its heels versus the dollar on Monday in New York, unable to sustain last week's gains as risk aversion limited interest in high-yielding currencies. With today's ...</div>
</div>
Euro, British Pound Pare Previous Week's Advance on US Dollar Strength
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/us_open/2010-03-15-1049-Euro__British_Pound_Pare_Previous.html" style="font-size:1.2em">Euro, British Pound Pare Previous Week's Advance on US Dollar Strength</a>
<br> <span style="color:#888888;">Daily FX</span> - <span style="white-space:nowrap">Mar 15, 2010 </span>
<div style="width:80%;">The Euro halted the three-day rally against the greenback and slipped to a low of 1.3706 during the overnight trade, and the single-currency may face increased selling pressures going into the US ...</div>
</div>
Euro Recovers From 16-1/2- Month Low Against Franc
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.rttnews.com/Content/CurrencyMarket.aspx?Node=b3&Id=1241570" style="font-size:1.2em">Euro Recovers From 16-1/2- Month Low Against Franc</a>
<br> <span style="color:#888888;">RTT News</span> - <span style="white-space:nowrap">Mar 15, 2010 </span>
<div style="width:80%;">(RTTNews) - The euro recouped its losses against most majors during early European trading on Tuesday as the stock markets opened the day in green. The euro thus recovered from a 16-1/2-month low ...</div>
</div>
Weekly FX roundup: Euro pressure continues, markets look to China
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.ameinfo.com/226744.html" style="font-size:1.2em">Weekly FX roundup: Euro pressure continues, markets look to China</a>
<br> <span style="color:#888888;">AME Info</span> - <span style="white-space:nowrap">Mar 15, 2010 </span>
<div style="width:80%;">The lack of first tier economic data and stories from this past week has failed to capture the market's imagination and has largely kept the FX markets in their mid-term ranges. The currency and ...</div>
</div>
bought 1,000 Euros on that date, you would have paid $1,085.70.
One year later, the Forex rate of EUR/USD was 1.2083, which means that the value of the Euro increased in relation to the USD. If you had sold the 1,000 Euros one year later, you would have received $1,208.30, which is $122.60 more than what you had started with one year earlier.
Conversely, if the Forex rate one year later had been EUR/USD = 1.0576, the value of the Euro would have weakened in relation to the U.S. Dollar. If you had sold the 1,000 Euros at this Forex rate, you would have received $1,057.60, which is $28.10 less than what you had started out with one year earlier.
As with stocks and mutual funds, there is risk in Forex trading. The risk results from fluctuations in the exchange market. Investments with a low level of risk (for example, long-term government bonds) often have a low return. Investments with a higher level of risk (for example, Forex trading) can have a higher return. To achieve your short-term and long-term financial goals, you need to balance security and risk to the comfort level that works best for you. Article Source: http://www.upublish.info About the Author:
Gregory DeVictor
Gregory DeVictor is a consultant who has been developing and marketing web sites since 1999. You can learn more about how to develop your own Forex trading system at: http://www.Forex-Trading-System.name Ready to copy Article in either text or html format:
|
|
