What Influences Price?

Forex markets and prices are mainly influenced by international trade and investment flows. The Forex market is also influenced, but to a lesser extent, by the same factors that influence the equity and bond markets: economic and political conditions, especially interest rates, inflation, and political stability, or as if often the case, political instability. Though economic factors do have long term affects, it is often the immediate reaction that causes daily price volatility, which makes Forex trading very attractive to intra-day traders. Currency trading can offer investors another layer of diversification. Trading currencies can be viewed as a means to protect against adverse movements in the equity and bond markets, movements that of course also impact mutual funds. You should bear in mind that trading in the off-exchange foreign currency market is one of the riskiest forms of trading and you should only invest a small portion of your risk capital in this market.

What is Forex?

The off-exchange retail foreign currency market ("forex") describes the purchase of a particular currency from an individual or institution and the simultaneous sale of another currency at the equivalent value or current exchange rate. Essentially, the process of exchanging one currency for another is a simple trade based on the current rates of the two currencies involved.
At the core level of the world's need for money exchange is the international traveler. When traveling from the US to England, for example, you will of course need the local currency to pay for transportation, food, and so on. Upon arrival at the airport you will surrender (sell) your US Dollars in order to receive (buy) the equivalent in British Pounds. In this example, you sold the USD and bought the GBP, conversely the forex counter bought the USD and sold the GBP. The prices at which you buy and sell currencies are known as exchange rates. This rate or price fluctuates based on demand and on political and economic events surrounding each country's currency.

A Global Market

The example above illustrates foreign currency trading in basic terms as it relates to world travelers. However, the market is also utilized globally by each country's central bank (i.e., America's Federal Reserve), investment and commercial banks, fund management firms (mutual funds and hedge funds), major corporations, and individual investors or speculators. Depending on the timing of such transactions, purchasing a currency with the intent of later selling it at a better exchange rate (and vice versa) can potentially yield profits for investors, of course there is a strong potential for loss trading currencies as well.
Utilization by so many parties is why the Forex market is the world's largest financial market. This mind boggling volume is probably what led you to research the topic.

How do you access the market?

It is important to note that retail traders, such as yourself, will most likely be accessing the off-exchange foreign currency market (or Forex market) via an FCM (Futures Commissions Merchant) or broker. You will not be trading in the actual Interbank market itself. Your access to the total market will be determined by your chosen broker's limitations.
FCMs or brokers act as a bridge between you and their liquidity partner (sometimes larger global banks) that you would otherwise not have sufficient capital to do business with. ( view figure 1 ) The large majority of off-exchange retail foreign currency brokers act as market makers, meaning that by keeping many trades in house they create their own liquidity. Some retail brokers clear trades directly through to the larger banks that provide their liquidity. If you are new to the Forex market it would wise to research and understand your broker's particular business model and method of clearing trades.

Forex Market Hours

Unlike other financial markets, the Forex market operates 24 hours a day, 5.5 days a week (6:00 PM EST on Sunday until 4:00 PM EST on Friday). Through an electronic network of banks, corporations and individual traders exchange currencies, though as the market is primarily used as a means for speculative investing, actual physical delivery of currencies is almost never intended. Forex trading begins every day in Sydney, moves to Tokyo, followed by Europe and finally the Americas.

Forex Market

The off-exchange retail foreign currency market ("forex") describes the purchase of a particular currency from an individual or institution and the simultaneous sale of another currency at the equivalent value or current exchange rate. Essentially, the process of exchanging one currency for another is a trade based on the current rates of the two currencies involved.

Technical Analysis

Technical analysis” is an industry term that more often than not sounds much more complicated than the actual process is. Really, it ought to be referred to as “price analysis”, as this would be a more accurate description. Through the use of charted data traders around the world analyze their market of choice. The objective: attempt to determine future price movement. The means: understanding price movement patterns of the past.

Fundamental Analysis

Fundamental analysis is the study of the core underlying elements that influence the economy of a particular currency. This method of study attempts to predict price action and market trends by analyzing economic indicators, government policy and societal factors. Imagine financial markets as a large clock, the gears inside this clock that move the hands, or drive the clock would be these "fundamentals".

Trading Strategies

Learning your own style, or in other words trading method(s) that work for you, is an essential part of Forex trading. There is no correct approach that everyone should learn. However, every trader needs to assess how much risk they can comfortably handle. It is the single most important investment issue for a Forex trader to consider.

Programming

This is not intended to be a full fledge introduction to programming, but we will cover a lot useful information that you will need for the more specific classes. Please make sure you spend more time trying to understand and follow the logic than try to get the right answer. The truth is, in programming, there is not just one right solution.

Taxes

Taxation of forex is confusing and uncertain in the tax code and that makes tax filings difficult for forex traders. The tax-problem is that some types of forex are treated as IRC 1256 contracts with lower 60/40 tax treatment and other types of forex are treated as IRC 988 foreign currency transactions with ordinary gain or loss treatment. Plus IRC 1256 and IRC 988 are dueling and conflicting tax code sections.

Market Analysis

MA Video Archive | Market Analysis with Todd Crosland

Trading Support Hours

We offer trading support via the Internet or over the phone.
Sunday at 5:00pm EST to Friday at 5:00pm EST.

Toll Free: 
US and Canada: 866.468.3739
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International: +1.801.930.6800
Fax: 212.884.0609

Reasons to Call

The easiest way for customers to execute a trade is to log in to the IBFX Trader and place a trade. However there are some times when you will need to call our trading support team, such as:
- When access to the Internet is not available
- If you fail to receive a confirmation on an online order
- When you experience internet failure or failure to connect to the IBFX server

When Calling Trading Support

When calling for dealing support we ask that you conduct the business briefly and factually to make the process as quick and easy for you as possible.

Please have the following information ready prior to placing your call:

1. Your account number. Your User ID number is not valid identification.

Indicate whether you are placing a Market Order or a Limit Orde

ncluding both the number of units and the currency pair you are interested in. For instance... you will say, "I would like a price on 10 lots of USD/CHF." You will receive a 2-way price quote consisting of the spread between the Bid and the Ask. For instance, "1.4570 - 73". Please note that we provide you with a true, dynamic quote stream. These prices can change up to 4 times per second. Therefore, Market Orders will be executed at the current, available price when the order is placed. To execute at a specific price we suggest placing a limit order instead.

State your trade

Example, "I would like to buy 10 lots of USD/CHF at the Market." Or for a limit order, "At 1.4573 buy 10 lots of USD/CHF with a stop loss of 1.4553 and a take profit of 1.4593."

Remember: The price given is the trading price at that time; haggling is not allowed nor are Traders allowed to remain on the phone until the price changes. If you do not wish to trade at the quoted levels, simply say "Nothing Done" and hang up.

Note : All phone calls are recorded to ensure the integrity of the transaction.

Platinum Debit Card

Now it's even easier to access your account.

In our last customer survey you asked for more ways to access your margin account....we listened. We have partnered with one of the nation's premier financial services companies to bring you our new Platinum Debit Program.

Now you can transfer money from your margin account into your companion account and use your Platinum Debit card wherever Visa is accepted.

Platinum Rewards Card

Earn points simply for trading your IBFX account!

We have partnered with one of the nation's premier financial services companies to bring you our new Platinum Rewards Program.

The IBFX Platinum Rewards card not only gives you Rewards Points for your purchase, but you will also earn up to 50 Rewards Points for every standard lot round turn trade.

You can use these points to redeem for airline tickets, hotels, merchandise, event tickets and much more.

Apply for a Card

Follow the 3 steps below to apply for an IBFX Platinum Rewards Card.

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Deposit Funds to Live Account

Deposit Time 
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30 days from last credit card deposit

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$10,000 max over 30 day period per customer 

* A debit card can be used to fund your IBFX Trading Account, however the transaction is subject to the same eligibility and restrictions as any credi

Learn To Trade Forex

FOREX (the Foreign Exchange market) is an international market where participants speculate on the value of different currencies, buying and selling dollars, pounds, euros, and other currencies.

There are only a few major currencies to follow, compared to hundreds of stocks in the equities market. In order to get started understanding Forex, sign up for a free practice account today and learn as you trade!

Trading risk free with a practice account is the best way to get familiar with this ever-growing market. And once you are signed up, CMS Forex will provide you with thorough educational resources to guide you along the way.

So don't wait, take this opportunity to get started trading Forex!