Forex - FX

What Does Forex - FX Mean?
The market in which currencies are traded. The forex market is the largest, most liquid market in the world with an average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world.

Investopedia explains Forex - FX
There is no central marketplace for currency exchange; trade is conducted over the counter. The forex market is open 24 hours a day, five days a week and currencies are traded worldwide among the major financial centers of London, New York, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris and Sydney.

The forex is the largest market in the world in terms of the total cash value traded, and any person, firm or country may participate in this market.

Related Terms

• Arbitrage
• Authorized Forex Dealer
• Cross Currency
• Currency Option
• Currency Pair
• Decentralized Market
• Exchange Rate
• Foreign Currency Effects
• One-Touch Option
• Over-The-Counter - OTC
• More Related Terms

Related Links

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• The Forex Three-Session System - Market hours for Tokyo, London and New York determine volatility peaks. Find out how.
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• Play Foreign Currencies Against The U.S. Dollar - And Win - A drop in the dollar is no reason to panic. Learn to exploit the greenback's decline and profit from it.
• Where is the central location of the forex market?
• A Primer On The Forex Market - Moving from equities to currencies requires you to adjust how you interpret quotes, margin, spreads and rollovers.
• Getting Started In Forex - Before entering this market, you should define what you need from your broker and from your strategy.
• Forex: Wading Into The Currency Market - We go over the ground rules and available resources needed for this undertaking.
• Financial Tables: Currency Cross Rate Table - Whether for traveling or investing, learn how to convert your money.
• Trading Multiple Time Frames In FX - This is often the first - and most costly - level of analysis to be overlooked.
• Trading Through A Market Maker Vs. An ECN - Learn the pros and cons of trading forex through these two types of brokers.
• Getting Started In Forex Options - Stocks are not the only securities underlying options--learn how to use FOREX options for profit and hedging.
• Devising A Medium-Term Forex Trading System - Here we go over a framework from which to build your own personalized but profitable strategy.
• Forex: Venturing Into Non-Dollar Currencies - Learn how investments in foreign currencies can diversify your portfolio.
• How is spread calculated when trading in the forex market?
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• Free Introductory Forex Trading Guide from GFT - Everything a beginner needs to know before entering the exciting & fast-paced forex market – from how to choose a dealer to how to place an order

Institutional Futures Trading

vCapFutures is an institutional futures broker that offers clients access to global commodity futures and options products such as equity-index futures, currency futures, interest rate futures, energy futures, metal futures agricultural futures and single-stock futures.

Through our high-end institutional futures trading platforms and institutional-class technology, we can assist institutional clients with commodity futures risk management and hedging requirements as well as help your institution use the market to limit the impact of volatility, capture and retain quality and specific-trait advantages, control, streamline and mange corporate revenue streams and cash management systems. Our demand-side clients benefit from the same principles, technology, research and strategies as those on the supply side.

Institutional Futures Platforms

Institutional Futures Broker With Expansive Floor Presence

As your institutional futures broker, buy-side and sell-side clients, alike will have access to expansive floor service in the US and access to many international exchanges (Eurex, Euronext, Xetra, Liffe).

24-Hour Trading Desk

Institutional clients can execute orders on a 24-hour basis in the electronic markets via our institutional futures platforms (X_Trader & X_Trader Pro) or broker assist. Our trading desks are staffed with highly experienced individuals that understand the demanding requirements of the institutional client and are designed to deliver the speed and reliability our clients need when they call to place trades over the phone. The desk will monitor your orders to ensure accurate execution at the best available prices, making sure all price improvements are gained by your institution. Broker assist services include the ability to leave various types of contingency orders with the trading desk 24-hours a day, including stops and limits.

Exceptional Clearing

As a vCapFutures institutional client, you can expect: easy to understand statements; accurate reporting of fills, cancels and rejects; timely fill reports and status on open orders; timely position reports; efficient processing of wires, deposits, withdrawals as well as accurate reporting of account balances, commissions and fees.

Sound Risk Management

vCapFutures views risk management as being of paramount importance - we are always cognizant and mindful of the institutional client’s tolerance for risk. With the combined efforts of vCapFutures and your FCM, we monitor institutional trading activities and overall market trends to effectively measure and manage risk, creating an environment where capital is secure and available for use by our institutional clients.

Research

vCapFutures provides institutional clients with access to highly-regarded proprietary futures research that offers authoritative and timely analysis of the futures markets (interest rate, agricultural, energy, currency, metals, equity, and "softs" markets). Your institution will have immediate access to breaking news, interactive charting and the latest reports directly from the floor of selected exchanges and remote locations across the United States from the convenience of your desktop Internet connection. In addition to breaking news, you will also have access to more than 40 daily broadcasts, including morning and afternoon roundtable discussions that encompass the spectrum of futures market perspectives.

Currency Futures Trading

Although the FX market, is the largest financial market in the world, a surge in volume and enormous growth has also taken place in the currency futures markets as institutions are accessing different venues of FX liquidity.

By utilizing our high-end institutional trading systems and front-end solutions, we believe exporters, importers, hedge funds, non-banking institutions and speculators alike can take advantage of this alternative venue of FX liquidity and use the currency futures markets to manage foreign exchange risk, gain price improvement on trades, achieve lower trading costs and conduct their cross-border transactions more efficiently and securely.

As world currencies increase or decrease in relation to other currencies, a multitude of economic & political forces affect the international currency markets such as: political stability, economic climate (depressions, recessions and expansions), central bank or government intervention, changes in interest rates, money supply growth and inflation. By using our advanced front-end trading systems, we believe our clients can have a competitive edge against many factors that contribute to foreign exchange risk:

• Floating Exchange Rates: In a floating exchange rate environment, the exchange rate responds to the flow of imports and exports, the flow of capital, relative inflation rates and more. Often, limits are placed on exchange rate fluctuations according to government policies.
• Merchandise Trade Balance: One factor affecting the exchange rate between currencies is the merchandise trade balance. This is the net difference between the value of merchandise being exported and imported into a particular country. For example, the net difference between the Canadian demand for US dollars to buy American merchandise, and the supply of Canadian dollars affected by the Americans' purchase of Canadian merchandise, is the merchandise trade balance between the two countries.
• Flow of funds to pay for stocks and bonds: The flow of funds between countries to pay for stocks and bonds also affects the currency exchange rate between countries. However, in the near term, capital flows are greatly influenced by yield differentials.
• Yield differentials and their affect on currency values: Yield differentials is the difference between interest rates in various countries and how it affects currency values. All else being equal it stands to reason that a higher yield on German securities (compared to American securities) would make German securities more attractive. What's more, an increase in German yields would raise the flow of U.S. dollars into German securities, and decrease the outflow of Deutsche marks to American securities. This increased flow of funds into Germany would lower the value of the U.S. dollar and increase the value of the Deutsche mark. Hence, the Deutsche mark to U.S. dollar ratio, as it is represented in the foreign exchange market, would potentially decrease.
• Rate of inflation: Consumers try to avoid the eroding effect inflation has on their purchasing power. Consequently, goods from countries with a low inflation rate become more attractive than the goods from countries with higher inflation. In turn, the currency from the lower inflation country rises in value, while the currency from the higher inflation country falls in value. Both the inflation factor and the purchasing power of the currencies directly impact currency exchange rates. For example, if the United States is experiencing lower inflation than its trading partner Germany, the EURO/USD ratio would rise to reflect the growing price level in Germany relative to the United States. This factor is rooted in the concept of purchasing power parity. It holds that, over the long run, a currency exchange rate adjusts to reflect the difference in price levels between countries.

Whether you are an exporter, importer, hedge fund, global fund manager, non-banking institutions, government agency or a speculator, vCap Futures can provide you with access to the world's most important electronic and pit-traded currency futures products:

• Euro Dollar
• Japanese Yen
• British Pound
• Australian Dollar
• Swiss Franc
• Canadian Dollar

• South African Rand
• Hungarian Forint
• Polish Zloty
• Czech Koruna
• Brazilian Real
• Swedish Krona

If you are interested in trading currencies in the inter-bank spot market (cash / forwards), please visit www.vcapfx.com

Advantages

We believe the advantages of trading currency futures to be:

• Diversification: Currency futures can provide investors with a well-balanced portfolio through diversification and low systematic risk. Price fluctuations in currency futures have very low correlations with price movements in stock market values and interest rates. This lack of any systematic relationship can lower portfolio risk when the equities and interest rates are in a depressed state.
• 24-Hour Trading: Currency futures trade nearly 24-hours a day in the CME, Globex market or open out-cry trading pits.
• Highly Liquid: Investors can enter the currency futures markets and exit positions efficiently, as they are one of the largest and most liquid markets in the world. Currency futures markets can absorb trading volume and transaction sizes that dwarf the capacity of many of the world’s equities markets.

Four Key Elements of Futures Trading Success

There are four key elements to achieving success as a futures trader:

1. Self-confidence
2. Discipline
3. Ability to handle loss
4. Profitable trading system

Self-confidence. If you aren’t confident that you can become a successful futures trader, you might as well pack it in now and save yourself a lot of grief. Successful futures traders are bold, aggressive and self-assured. They do not lose faith in themselves when they lose. They have the courage and self-confidence to keep trading. Futures traders are risk takers. We are the Mario Andrettis of Wall Street.