What Is The Australian Dollar What Influences The Australian Dollar

The Australian dollar is one of our listed currencies in Forex products. Find out more about the Australian dollar and what influences the Australian dollar.

Australian Dollar is the official currency of the Commonwealth of Australia including several islands under its influence. Its ISO official code is AUD but it is also commonly written as the dollar sign with the letters AU. At present, it is estimated to hold the sixth place on the list of world’s most-traded currencies. It shares about 5% of the worldwide foreign exchange business.

The foreign currency traders all over the world like to trade in Australian Dollars because of the high interest rates in Australia. It is also greatly exposed to Asian economic markets and the commodities cycle. The general stability of the economic and the political system of the country also attracts the investors to invest in Australian Dollar.

Australia has a gigantic metal mining industry. Thus when the metal prices tend to go up, Australian Dollar also sees an upward trend. The Australian economy is highly facilitated by strong domestic economic activity. The economy of Australia is mainly dependent on the policies of the West. It’s a capitalist economy and has the GDP per capita income at par with the four leading economies of Western Europe.

Australia has reinforced its relations with China over the recent years. This association has helped a great deal in strengthening the economy of the country, thus escalating the value of Australian Dollar.

One thing which has affected the Australian Dollar in a negative way is the country’s trade deficit which went bad due to famine in some areas of the country and strong requirement to import. Another point of concern is the brisk increase in the domestic housing prices. This has raised the prediction that the Central Bank will have to increase the interest rates to keep the prices and inflation under control. This will stop the crisis from aggravating further and will help the economy to be secure.

How to conduct Forex trading?

Forex trading is a trading method devised during the 1970s, as exchange rates between various national currencies became more flexible and subject to market fluctuations. The basic principle behind Forex trading is that an average person with money to invest can make a profit by selling it when exchange rates go up.

The invention of internet technologies in the 1990s made Forex trading even faster business to perform than before, and now fluctuations in exchange rates could occur within seconds.

Each Forex transaction is performed with two currencies, which are called a “pair“. In each pair, one currency is called “base currency” and is used to pay for the purchase of the currency that is traded, which is called “quote currency“.

Each Forex trader must define to himself from the start the price he is willing to pay, which is called “bid” and the price at which he is interested to sell, which is called “ask“.

The price paid by the trader must be subtracted from the price that was paid to him at the end of the transaction, and the difference is called “spread“. As long as the spread is positive, this means the trader is making profits. Forex trading takes place in large financial centers such as Wall Street or the City in London.

However, it can also be done online from a personal computer, which makes it easier for many individuals to engage in Forex trading without leaving home.

Nevertheless, Forex trading is also a risky business. It is very easy to lose money if the person making the investment doesn’t know in which currencies to invest. For that purpose, Forex trading contains various strategies to deal with difficulties. For those who cannot follow the market fluctuations 24/7, there are always the options of Forex trading with binary options, which allow the investor a double or nothing type of transaction.

It is also possible to conduct Forex trading transactions over a short time frame of an hour or few hours, and this way the trader does not need to spend whole days in following market fluctuations. In addition, there is computer software that teaches the average person to follow market fluctuations. Another problem is that it may be difficult for some individuals to carry out entry and exit transactions at the exactly required moment, as fluctuations are very fast.

For that purpose, there is the Forex robot, which is a computer that buys and sells the required currencies at the exact moment demanded of it. But the best way for an investor to enter the Forex trading business would be by hiring a Forex broker, which is an expert who can explain to his client all the risks involved and can perform Forex trading on his behalf and by his orders.

Forex trading can be a good business if being done properly. It is imperative for the trader to have a sum of money to invest, and a lot of patience.

If you’re new in the forex industry, you may follow our foerx educational videos and daily forex news in order to learn the basic of trading and be updated with the market.

Forex Social Networks – What Are They and Are They Useful?

Within the last year, there has been an increase in the number of Forex social networks in existence, potentially as a result of the incredible success of the likes of Facebook. Whilst many people will know of a Forex social site, most of these people never sign up.

Do you know any Forex social sites? Are you currently a member? Chances are that the answer to the first is “yes” and the second is “no”. This is not surprising. Let’s take a look at why Forex social networks are having a hard time gathering members whilst looking at the reasons why joining one might actually be an extremely good idea in the longer term.

What is a Forex Social Network?

Unlike Facebook or MySpace, a Forex social network is a dedicated network of Forex traders, all of whom share their trades for their friends to see. There are a number of different iterations and formats – but in general, the idea of an FX social network is to increase transparency and provide a medium by which you are able to share your trades and trading knowledge with likeminded people.

One FX social network has even gone as far as allowing you to “follow” a particular trader, which automatically places trades on your account when they make a trade. This is an interesting feature – bit also quite a dangerous one at the same time.

Why FX Social Sites Might be Useful

Despite the hassle of setting up yet another social profile and going through all of the steps to link your FX social account to your FX broker account (so that all of your trades can be recorded) – there are a few benefits to being part of a social network.

Take a look at the list below. This list is a number of benefits that people see from joining an FX social network:

  • Able to verify that the majority of traders are on the same side of a particular currency pair as you are
  • See what other likeminded people and likeminded traders (those using similar strategies) are doing with their trading accounts
  • Filter through top trades and see which accounts are making the most money

Another great reason to join an FX social network is that it allows you to surround yourself with people who enjoy doing the same things as you do. Unlike Facebook and MySpace, where your “friends” might think you are a bit “nerdy” for continuously talking about FX trading, a specialty FX network will accommodate you and be on the “same page” as you are.

Check out our Daily Financial News and Forex Educational Videos to Learn the trading yourself.

2 Alternatives to the Spot Forex Market

What many Forex traders do not know is that there is actually more than one type of Forex market to trade on. Yes – most brokers will only offer one (the spot Forex market) – but there are a few Forex brokers out there who have flexibility as to the market that you are able to trade on.

In this article, we will take a look at the other Forex markets, and try to examine the difference between them and the spot market. This should provide you with a better idea of exactly which market is best for your style of trading.

The Forward Market

The Forex forward market is an entirely separate market from the spot. You will find that when looking at currency pairs in the forward Forex market, the quotes are completely different to those found on the spot rates.

This is a function of what the market is actually providing. As you might have gathered from the name of the forward market – this particular arena is offering rates to buy foreign currencies in the future. There are a number of different quotes for different time frames. For example, the following time scales might offer different rates to trade at:

  • 1 month
  • 3 months
  • 6 months
  • 12 months

Many spot Forex traders utilize forward rates to help them predict the future movements of a particular currency pair. The reality is that a 12 month forward Forex rate is the price that traders expect the currency pair to be trading at on the spot market in 12 months time, and therefore this is often a good measure of the future moves of the market.

Swap Rates

Another market entirely separate from the spot and forward Forex markets is the Swap Market. This market is used in complex currency trades, which are often far beyond the needs of mainstream retail spot traders.

Swap rates are those which are used when transferring real currency from one country to another, without the need to actually convert the currency. Whilst the swap rates are often similar to spot market Forex rates, the swap market also has timescales just like the forward market.

Swap rates are used by large corporations trying to hedge their overseas exposure, or by importers and exporters who do not want to trade a particular currency pair at the current time, but still need to pay their counterpart in another country. Often, the swap market doesn’t even get a mention by Forex brokers because of its complexity.


What is the Next Big Technological Step in Forex Trading?

FX trading utilizes some of the most complicated financial trading mechanisms and software in the entire financial world. It has been argued a number of times that facilitating the retail FX trading environment takes up more resources throughout the world than any other financial market – and we absolutely believe that this is true.

Each and every day, over 6 trillion USD worth of currency changes hand. To keep track of all these millions of transactions, technology needs to continue to evolve to make trading faster, more reliable, and of course – fairer.

So where is FX technology heading? Are we in for a revolution in the way that we trade Forex in the next few years, or are things currently sailing along a nice course smoothly?

The Next Big Thing in Forex

We’ve already seen the addition of Forex trading apps for iPhone and Android devices. The iPad has also revolutionized the way that we trade Forex. But are there any other technological developments which could take place in the near future?

Yes! However, they are more behind the scenes changes than ones which are actually practical to use from a customer standpoint.

One of these changes will be the way that Forex transactions are processed behind the scenes. At the moment, most transactions are routed through a dealer before actually being executed. Whilst this is still a very fast method of trading – it does lack the speed and ability that “non-dealer” trading has. Essentially, non-dealer trading is where trades go straight to the trading floor so that your broker doesn’t even have a chance to view the trade before it is executed.

There are a number of positive features to having this take place. Trading times are increased, and the following things are minimized:

  • Slippage
  • Re-quotes
  • Intervention and trade cancellation by the FX broker
  • Trading errors arising from Forex broker error

As you can see, once all Forex brokers begin using this new system, trading times will be chopped in half, and the industry as a whole will operate much more fluidly.

Other Enhancements to Forex Trading

A few other enhancements include trading from the charts. This is utilized currently by just a few Forex brokers, but there are still numbers out there which do not allow this functionality. This should change within the next 2 to 3 years, as chart trading becomes much more important to technical traders.

The Bascis of Automated Forex Trading Signals

Forex trading can often result in frustration and irritation, primarily because the industry targets your most valuable assets, which are your emotions. At times, traders can make wrong decisions because of their fear and greed, which can cost them a lot in the long run. However, if you use an automated forex trading signals, you might not have to go through all these issues and can then save yourself from unnecessary trouble.

Automated forex trading signals are based on a set of rules that are predefined. These rules take several factors into consideration, and then automatically open and close trades.

Before you can start using an automated forex system to your advantage, you must thoroughly grasp its basics. In simple words, forex trading involves purchasing and selling of currency pairs. You have to choose a currency, which is growing stronger in the market because its value is improving rapidly when compared to other currencies. You can then trade any currency that you own with the one that has a higher value.

There are many forex trading platforms, through which automated trading is carried out. These platforms vary in features, but the basic purpose of each is the same. A few of these platforms also allow you to program your own trading system, which can then be used in conjunction with your account. The Metatrader 4 platform is a very popular customizable forex trading platform. This platform allows you to program your own auto-trading system or signals systems. You can then even export this program, and use it with other Metatrader installations. The format used by this platform is called “Expert Advisor”. The Metatrader 4 platform is widely available on the internet, and is offered by many top forex brokers like Liquid Markets.

Automated forex trading may seem really easy right now, but there is actually a lot more to it. One major problem is that there are many automated systems on sale that are scams. These systems may be characterized by very luring and attractive sales pages, but the program does not work as well, and is liable to make incorrect decisions. There have also been cases where individuals have installed these systems into their accounts, and lost all their money the next day. So you should make sure that you are using a reliable program.

You can avoid scams if you use an automated forex trading system on a secondary account that is basically meant for experiments and is thus characterized by low risk. In case your installed software was not good enough, you would not lose everything that you have. This strategy also gives you a diversified approach to the forex market because you can then trade different tactics with the multiple accounts that you have.

Despite the scam issue, automated forex trading is still recommended. While you can never stay up, and trade for hours on end, your system can do it for several days without stopping even once, which helps you catch all possible forex movements. As long as you use a trusted forex trading system like the Metatrader 4 platform, you are quite protected from scams and frauds.

Why you should go in for a forex micro account

In order to trade in the currency market, you need to have an account with a forex broker. The forex broker is your access to the market and basically provides you with tools to trade in the market. IMMFX as a leading forex broker in the industry offers different kinds of accounts for their customers based on the needs of their customers. A forex micro account is one such type of a forex account.

A forex micro account has been basically designed keeping a newbie forex trader in mind. In case of a micro forex account, the minimum required investment is $50 only. Thus you can start your trading career with this so little amount. Apart from this, the leverage is up to 500:1 for this type of account. Also, the lot size, which is 0.01 for this forex micro account is smaller than that for a normal account. Thus you have the option of buying more number of lots by spending only a small amount of money.

There are a few advantages of using a micro forex account. Some of these have been discussed below:

  • A micro account can be used by a trader as a means of building up confidence and honing his or her skills in the currency market. The general strategy that can be used is that the trader can deal with a smaller number of lots and gradually build upon the profit that has been generated.
  • A micro forex account is also a great means of experimenting and formulating a trading strategy. Though demo accounts can be used for strategy formulation, the strategies formed on demo accounts usually do not hold up for real accounts hence micro accounts can be used to make strategies. This is due to the fact that since the investment is small, there is a smaller amount of risk involved. Hence most of the professional forex traders use micro accounts to formulate strategies and then use those strategies to trade on normal forex accounts.
  • A forex micro account can be opened using a very small capital and due to a large amount of leverage option involved it can very easily and quickly be used to increase your bankroll.

A forex micro account is basically a trimmed down version of a normal forex account. Though the amount of capital required and the leverage option involved is different from a normal account, almost all services that are provided with a normal account are provided with a micro account. This involves usage of tools for market analysis, trend recognition, and market investment.

IMMFX’s forex micro account can be a great tool for people who are interested in making a livelihood from forex trading but do not know where to start from. These accounts can also be advantageous for those who wish to invest in the forex money but only have a small amount of money. Thus it can be said that forex micro accounts are a great way to invest in the market and make profits from it.