Forex Trading


Forex Funding is a leading hub in forex industry. Our goal is to make you aware of smart leading forex market. From understanding the underlying reason as to why the Forex market exists to basic strategies that are the foundations of understanding the dynamics of the Forex market.
This education hub is essentially a Forex resource centre that will grow with time. Our intention is to create a library of resources for our clients to access, place presentations on key topics and essentially add value by providing the tools and knowledge our clients require to trade with confidence. We will also use the resource centre to update our clients on upcoming seminars and webinars and occasionally we will seek to get high profile and experienced participants in the Forex markets to offer us their insights through interviews and live question and answer sessions.
Just like anything, education is the key to success. At Forex Funding, we endeavor to provide as much relevant training material as we can. This comes in many forms from simple articles highlighting the pitfalls for novice traders to the Forex Funding smart training, that increase as the user progresses. The educational material is further enhanced by content rich multimedia material such as videos.
 
What is Forex?
The foreign exchange or ‘Forex Market’ is the world’s largest financial market. It is a non-stop cash market where currencies of nations are traded through brokers.
It is estimated that, on average, $ 4.2 trillion is traded every day in the world Forex markets. The vast majority of Forex trading
does not occur on any one centralized or organized exchange but through brokers on the interbank currency market. The interbank currency market is a twenty four hour market that follows the sun around the world. Opening in Australia and closing in the U.S. whilst the market exists for organizations with exchange risk, speculators also participate in the Forex markets in an effort to profit from their expectations regarding shifts in exchange rates.

Who are the players in forex?
In the early part, the Forex market was used by institutional investors that transacted large amounts for commercial and investment purposes. Today however, importers and exporters, international portfolio managers, multinational corporations speculators, day traders, long term holders and hedge funds all use the Forex market to pay for goods and services, transact in financial assets & speculate or to reduce the risk of currency
movements by hedging their exposure or increasing their exposure through speculation.

Advantages of Forex Trading
The growth in the Forex market over the last decade has led to a number of advantages for the private investor. Trading material to educate the trader has become far more readily available. Support services via forums have become increasingly popular and in the event that you the private investor no longer wish to trade the account yourself, you have professional money managers that will take-over via managed accounts. In brief the main advantages for the private investor and the shorter term trader are:
    24 hour trading, 5 days a week with 24 hour cover provided by the broker.     
      1) Forex Funding provides 24 hour cover for its clients
      2) Cover from Sunday night through to Friday night.
    An enormous liquid market.
      $4.2 trillion* traded daily
    
    Market volatility.

      The Forex market is constantly moving providing volatility. It is this volatility that provides both long & short term traders the opportunity to profit from the Forex market.
    Products that are traded
      More than 70 products* being offered there are always opportunities in the market.
    The ability to go long or sell short.     
      You are not restricted to long positions only. If you believe that a currency pair is going down you have the ability to take a short position.
    Low margin requirements.     
      With the low margin requirement you are able to leverage your account up to 400.     
    A Wealth of Trading Resources.     
      The internet and growth in the retail forex market has led to a wealth of free trading resources via the internet.
 
Technical Knowledge for Trading the market

1) Technical Analysis
Technical analysis is the method of evaluating traded products by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts believe that the price contains all known information and therefore technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity.
With wonderful sounding names such as Elliot Wave Theory, Candlestick Charts, Moving Average Convergence Divergence (MACD) they all have the common aspect of presenting us with a visual approach to market analysis. In the section we introduce you to a handful of methods that are currently applied to the market.

 2) Support and resistance
Support is the price level at which demand is thought to be strong enough to prevent prices from declining further. Support levels are below the current price, though it is not uncommon for prices to dip below support briefly signaling a false breakout. With a support level broken, the market will move lower indicating that the sellers have overwhelmed the buyers. Once a support level has been broken, another support level will be established at a lower level and the tendency is that support level that was breached will now become a resistance level.
Resistance is the price level at which demand is thought to be strong enough to prevent prices from rising further. Resistance levels are usually above the current price. A clear break above the resistance level signals that the buyers are in control. In this instance there are fewer sellers and the price tendency is to move further up. Once a resistance level has been broken, another resistance level will be established at a higher level and as with the support level, when the resistance level is breached this will now become the new support level.

 3) Moving averages
Moving averages are very popular tools used by technical traders to measure momentum. They are usually the first tool that technical analysts are introduced to as they are simple to apply and are building blocks to more complicate moving average theories. The main purpose of these averages is to smooth price data so traders can be in a better position to gauge the likelihood that a current trend will continue. Moving averages are commonly used to predict areas of support and resistance and are also used in conjunction with other indicators to help give more accurate entry and exit signals. There are different types of averages that vary in popularity but, regardless of how they are calculated, they are all interpreted in the same manner A very simple theory is the moving average crossover. This is where you combine two moving averages with differing time frames. Where they cross will indicate the entry and exit points to a trader.
 
4) Fundamental Analysis
Fundamental analysis is the study of the core underlying elements that influence and impact on the underlying price of a security or a countries economic well being. This method of study attempts to predict price action and market trends by analyzing economic indicators, government policy and other factors. Whilst fundamental analysis may help you forecast an underlying real value for a stock or share, when it comes to fundamental analysis for the foreign exchange markets, the analysis is carried out to forecast economic conditions and underlying direction. Therefore for the currency markets, fundamental analysis is not an exact science to predict price. For example, you might get a clear understanding of the health an economy by studying an economists forecast of an upcoming economic release but that will not give you entry and exit points, simply price direction.
Fundamental analysis and the resulting figures will involve interest rates, central bank policy, political figures or events, employment reports whether seasonal or unemployment figures, gross domestic product (GDP), etc. These economic indicators are snippets of financial and economic data published by various agencies of the government or private sectors for each country. These statistics, which are made public on a regularly scheduled basis, help traders monitor the health of the economy.

Fundamental analysts broadly label economic data and news releases into three categories. The release is either there to reflect the current state of the economy which is referred to as a coincident indicator, is alternatively known as a leading indicator as the release will look to predict future conditions or is finally known as a lagging indicator.

Forex History

The history of Forex

Back in prehistory, there was no concept of currency. A cow was a cow and a sheep was a sheep. People bartered goods for other goods. The problem was that when you traded ten sheep for five cows, you had to find somewhere to keep the cows. Cows are large; they don't fit in your pocket. Something had to change.
Mesopotamia

Urban societies started to emerge in Mesopotamia about 5300 BC. Wealth was based on agricultural products primarily grain. Grain was stored in temple granaries, and when people made deposits, they needed receipts the receipt came in the form of a piece of metal.

By 3000 BC, this evolved into the shekel, a measure of barley. Shekels could be converted into metals such as copper, silver and gold.
Then, around 1700 BC, the Code of Hammurabi established formal laws in Mesopotamia. This included rules around the use of money in Mesopotamian society.
Money was born.
Coins

The problem with most early money was that there wasn't any standard measure. A piece of gold could be small or large, so there was no way to place a consistent value on traded goods.

Coins solved this problem. They had a standard weight, and were stamped with symbols by the state to prove their authenticity. The first standardized metal coins appeared in Greece in the seventh century BC.
The gold standard

The value of a coin continued to be determined by its weight into the early 17th century; a Dutch Guilder had one weight and a French franc had another.

However, as trade grew, coins became more and more impractical. Banks started to issue money in large denominations, using cheap materials such as paper. Physical money no longer had an intrinsic value; instead it could be redeemed at banks for gold or other precious metals.

After the Napoleonic wars of 1803-1825, a number of nations fixed the value for their currencies against gold, and promise to redeem the notes directly. Currencies could now be exchanged based on their fixed values.
This was the gold standard.
The world at war

The gold standard continued until World War I. However, there were growing concerns about some countries' ability and willingness to redeem their banknotes.

The chaos of World War I put an end to the gold standard, and nothing replaced it until 1944.

Although the gold standard was dead, international financial institutions did start to emerge between the wars. The most important was the Bank or International Settlements (BIS), founded in Basel in 1930. Its charter was to support countries without mature financial systems, or those with balance of payments deficits.
1944

In 1944, delegates from 44 Allied nations met in the United States at Bretton Woods. Economic luminaries including John Maynard Keynes and Harry Dexter White worked to create a new global financial system, so that shattered countries could be rebuilt after the war.

The Bretton Woods Agreements were signed in July, 1944 with the following results:

    The International Monetary Fund (IMF) was established
    Countries who cooperated with the IMF could receive stabilisation loans
    The US dollar and British pound were announced as international reserve currencies
    Currency values were fixed against the US dollar - with only 1% deviation allowed
    The value of the dollar was fixed against gold
    Countries could only alter their exchange rates with IMF permission
    Currencies became convertible
    Governments were required to hold reserves and intervene in currency markets
    Nations had to pay a fee in gold and national currency to join the IMF

1947

After World War II, the US became increasingly concerned with the ability of a war-ravaged Europe to resist Soviet communism. In 1947, it established the European Recovery Plan, popularly known as the Marshall Plan after the US Secretary of State, George Marshall.

Over four years, European countries received nearly $13 billion dollars under the Marshall Plan, allowing them to buy the goods and services they needed to rebuild.
1964

In 1964, Japan made the yen convertible. With all major currencies now convertible, it became clear that the US could no longer sustain a fixed dollar rate against gold.

US dollar inflation became a major issue, and the US administration took steps to control US dollar transactions through taxation of exchange differentials. Costs increased for foreign borrowers, leading to the creation of a new eurodollar market.
1967

The British balance of payments deteriorated through the 1960s, and their gold reserves declined from $18 billion to $11 billion. In 1967, the UK had to devalue the pound, striking Bretton Woods a crippling blow. At the same time, US debt continued to grow.
1971

Events accelerated in 1971:

    In May, Germany and The Netherlands allowed open trading of their currencies
    In August, the US balance of payments deficit reached crisis point and President Nixon responded by stopping conversion of US dollars into gold

In December, matters came to a head:

    A last attempt was made to save Bretton Woods in a meeting at the Smithsonian Institute in Washington
    Exchange rates were allowed to deviate up to 4.5% from their fixed values
    Central banks made major interventions in the currency markets - including $5 billion from the Bundesbank
    Exchange rates could not be controlled despite these interventions
    Currency exchanges in Europe and Japan were closed temporarily
    The US devalued the dollar by 10%
    Developed countries floated their currencies ending fixed exchange rates

1973 to 1974

Over this period, events continued to unfold:

    The US dismantled the tax measures and other restrictions it had introduced in 1964
    Central banks stopped intervening in the currency market
    Speculators made enormous profits once interventions stopped
    Two major banks - Backhaus Herstatt and Franklin National Bank - went bankrupt
    Speculation damaged many other banks
    The Bretton Woods system ceased to exist

1976

Representatives of major nations met in Kingston, Jamaica, to create a new global currency system. This had the following results:

    Gold was no longer used as the basis of currency valuation
    International organizations were set up to control currency conversion
    Currencies were used to buy other currencies
    Commercial banks became the main mechanism for currency conversion
    Exchange rates were floated and were driven by market forces

The modern forex market had begun.

Forex Tools

 Divine Work Securities thrives in providing its members with every opportunity to trade successfully in the Forex  market and as a result provides the below tools and education, available to all members, free of charge, to help them in every way possible.
Economic Calendar
   
Stay abreast of the market with our real time economic calendar, providing easy and quick access to main economic events that impact the day to day movement of the Forex markets.
Technical Analysis

Round the clock technical analysis of your favorite instruments! At Divine Work Securities we provide you with intraday technical analysis, 3 times a day to assist you fully in analyzing the market and identifying potential trades. The analysis comes with both support and resistance levels as well as target levels for your potential trades.
Auto chartist Automated pattern recognition
   
Auto chartist has been assisting traders for years, through its automated pattern recognition. If you are unsure of what to trade, then why not follow the guidelines of a tool that has produced an accuracy of 70% in all its trading alerts. This advanced intraday tool analyses the market and highlights trading opportunities by automatically providing both audio and visual alerts on chart and Fibonacci patterns.

Zulu Trade
Why spend hours studying charts and trying to figure out patterns when you can copy from the best! Zulu Trade allows you to follow traders and copy their trades in real-time. Choose from a list of trading experts, complete with real historical information on past trades, and start copying. It is possible to follow multiple experts at once with no human intervention needed.

Video Tutorials
Are you new to Forex? Finding Forex confusing? Discover our free video tutorials, designed for newcomers and veterans alike. There is a full range of educational material to help you better understand the world of Forex as well as easy and quick navigational videos to help you use our platforms.

Currency Rates
Live Currency rates table displaying real-time bid and ask quotes, giving you quick access to the Forex, commodities and stock indices market movements.

Glossary
Find the most commonly used lingo in Forex . the most used terminology in Forex Trading, financial and investment words definitions, explained in layman's terms.

FAQ's
Frequently Asked Questions Find answers to the most common questions relating to both Forex and Divine Work Securities.