The foreign exchange market has become popular in the past few years as a means to make money online. Indeed, with access to the internet, you can also participate and invest in the currency market and get good profits as well.
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If you want to learn how to trade foreign currency in the forex market, here are some of the basics.
- Foreign exchange is just about buying and selling currencies in the aim to make profit out of the differences in their values. In the currency market, buying and selling is done in currency pairs such as the US Dollar - Euro pair or the US Dollar - Japanese Yen pair. In the forex market, just about eight major currency pairs are being traded.
These currency pairs are also represented by three-letter notations such as USD for US Dollars, EUR for the Euro, JPY for the Japanese Yen and so on. Among these currency pairs, you have to choose then where you want to invest. This decision, of course, will be based on your market analysis on what currency will go up on value for the next few days or months. You have to keep in mind however, that there are currency pairs that are very volatile - or those that fluctuate easily and may fluctuate steeply that can make you lose more or gain more abruptly.
Of course, if you are not that prepared to face such market changes, it is wise to research and be well-informed before going to live trading. You can also invest your time on practicing in a demo account so you will see and feel what it is like to be trading.
To learn how to trade foreign currency, you have to understand also the factors that can bring the value of a currency down or up. You can do this by doing a forex market analysis which can be done in two methods - the technical analysis and the fundamental analysis.
In the technical analysis, you will need to study the trend of the currency rate in a period of time, and this is usually plotted in a chart. You can also identify patterns of the currency rates that can give you a hint on the possible trend or direction of the rate of the currency. Given the technology today, you can actually let a software do the technical analysis for you and generate information that you can use in making your trading decisions.
On the other hand, fundamental analysis involves analyzing the factors that affect the currency value such as the political and socio-economic situation of the country to which the currency belongs. With these analysis, you will be guided what currency pair to buy and sell.
If you have decided on the currency pair, you can then start by buying currency at a lower rate and selling them later when the rate goes up. Say, if you think that the Euro's value will go up in the next few months, you can buy today at a lower rate and sell them months after when the rate goes up, making a profit in the process. You can also make profit by selling the other currency pair when its value is up and buying back if the rate is down.
Learning how to trade foreign currency seems to be easy but then again, always keep in mind that forex can be very risky, so you have to be well prepared in this venture.
In today's electronic world, there are several new instances of sophisticated financial fraud. Some cases are easier to detect, however, in an increasingly uncertain economic environment, mostly because of the unease of the US Dollar and the increasing strength and influence of the Euro. This has resulted in "banking instrument" fraud becoming increasingly common. I decided to write this article because as an international tax lawyer my offices have been receiving more than a dozen requests per month from honest clients looking to make money with a "sophisticated project" simply to discover that the "project" was on par with letters from Nigeria that promise unclaimed fortunes to appear on your doorstep because a dying uncle mentioned you in his will. I also compiled the list below with help from other credible sources I found on the internet.
In general, if you are approached to make a high yield income investment or to become involved in the prime bank investment 유로247 fraud, then you should carefully look at the documentation that you are asked to sign and always use the advise of an experienced professional such as an accountant or a lawyer. Such documents are normally filled with meaningless legal gibberish that are relatively easy to spot if you are dealing with fraudsters.
Some of the typical phrases you should look for are set out below. Some of them are meaningless and have no legal definition, but they were inserted into the documents or proposal in order to impress unsuspecting investors:
· Ready Willing and Able
· Prime Bank Guarantees (PBGs)
· Prime Bank Notes (PBNs)
· Guaranteed by Top 100 World Prime Bank
· Unconditional S.W.I.F.T. Wire Transfer
· Freely negotiable, irrevocable, clear SWIFT wire transfers
· Callable Conditional Sight Drafts
· Closing Bank
· Issuing Bank
· Fiduciary Bank
· Bank Menu
· International Banking Days
· ICC (International Chamber of Commerce) 400
· UCC (Uniform Commercial Code) Form references
· Banking co-ordinates
· Fresh cut paper
· Seasoned paper
· Collateral Houses, Collateral Source, Collateral Supplier
· Collateral First Transaction
· Grand Master Collateral Commitment
· Validation of the MCC (Master Collateral Commitment)
· Collateral Purchase Orders
· Collateral Provider
· Instruments delivered free of all liens and/or encumbrances
· Non-circumvention and Non-disclosure agreements
· Irrevocable Pay Order
· Irrevocable, irreplaceable commitment of funds to purchase instruments
· Lending Bank, Funding Bank, Closing Bank
· Good clean cleared funds of non-criminal origin
· With full corporate and legal responsibility
· Interest at seven and one half percent, payable annually in arrears
· 5, 10, 20 years etc. plus one week or one day
· Fully binding commercial letter contract
· Client Company Principals
· Transaction Trenches
· Millions or Billions of US dollars with rolls and extensions
· Emissions, remission, commissions and fallout
· Transaction parameters
· There is to be no communication with our bank other than through the normal bank channels, no phone call allowed.
If you see two or three of the above all in one document, then you ought to seriously consider whether or not fraud is involved and take reputable independent legal advice.
In the next part we will describe more about the most common fraudulent transactions: "Bank Guarantees" and "Discounted Bank Instruments".