FOREX AND THE STOCK MARKET

Forex works 24 hours a day. You can always trade when you want or when you have time, even at night.

The stock market in USA works only from 9.30am to 4:00pm EST. If you are working you can't participate in daytrading on the stock market. And this leaves you with few options - to quit your job to participate in trading, or not to trade at all.

There are always the same 5-6 major currencies traded on the Forex market, therefore you may be able to get a feel for price movement patterns and currency behavior very quickly.
There are thousands of securities on the stock market, and it is hard to understand why each particular stock will go up or down today. Choosing the right stocks from thousands, on a daily basis, is not easy thing either.

The Forex market is the largest market in the world, originally created for the big players - banks, investment funds, corporations and other financial institutions. It doesn't matter how many individual traders participate on this market at the current moment of time - they can't move this market at all.

On the stock market, which is much smaller, tens of millions of unprofessional investors greatly affect this market by their often chaotic trades, making the possibility to predict its movement harder.

You always can earn money either buying or selling currency. It doesn't matter if there is a booming economy, or a deep recession.

On the stock market, you can earn money mostly during a period of booming economy, when the stock market goes up. But economy development is cyclical - and periods of growth will eventually be replaced by periods of recession. And in this case, when stock market is going down, you can't win as a daytrader.

On the Forex market you have a unique feature - a so-called free "Demo Account" or simulated account, which allows you to participate in trading using real-time prices on the Deal Station with the same interface and functions as on real trading, using the same news and technical analysis tools to predict market movements, from the comfort of your home and via the Internet. You can gain experience in trading without loosing any of your real money.
On the stock market you don't have such a unique free training tool for Internet daytrading. In order to take a shot at the stock market, you have to put down your money first. Your real money.

We give you the opportunity and the time to develop your personal trading system, using demo account, and allows you to make an educated decision, with the help of demo trading, and other analysis tools which are at your disposal.


Forex is clearly the Market of 21 Century!
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HISTORICAL PERSPECTIVE FOREX

Foreign Exchange in a Historical Perspective
Currency trading has a long history and can be traced back to the ancient Middle East and Middle Ages when foreign exchange started to take shape after the international merchant bankers devised bills of exchange, which were transferable third-party payments that allowed flexibility and growth in foreign exchange dealings. The modern foreign exchange market characterized by the consequent periods of increased volatility and relative stability formed itself in the twentieth century. By the mid-1930s London became to be the leading center for foreign exchange and the British pound served as the currency to trade and to keep as a reserve currency. Because in the old times foreign exchange was traded on the telex machines, or cable, the pound has generally the nickname “cable”. In 1930, the Bank for International Settlements was established in Basel, Switzerland, to oversee the financial efforts of the newly independent countries, emerged after the World War I, and to provide monetary relief to countries experiencing temporary balance of payments difficulties. After the World War II, where the British economy was destroyed and the United States was the only country unscarred by war, U.S. dollar became the prominent currency of the entire globe. Nowadays, currencies all over the world are generally quoted against the U.S. dollar..


Main Stages of Recent Foreign Exchange Development
The main phases of the further development of the Forex in modern times were:

signing of the Bretton Woods Accord;
constitution of the international monetary fund (IMF);
emergency of the free-floating foreign exchange markets;
creation of currency reserves;
constitution of the European Monetary Union and the European Monetary Cooperation Fund;
introduction of the Euro as a currency.
The Bretton Woods Accord was signed in July 1944 by the United States, Great Britain, and France which agreed to make the currency market stable, particularly due to governmental controls on currency values. In order to implement it, two major goals were: emphasized: to provide the pegging (backing of prices) of currencies and to organize the International Monetary Fund (IMF).

In accordance to the Bretton Woods Accord, the major trading currencies were pegged to the U.S. dollar in the sense that they were allowed to fluctuate only one percent on either side of that rate. When a currency exceeded this range, marked by intervention points, the central bank in charge had to buy it or sell it, and thus bring it back into range. In turn, the U.S. dollar was pegged to gold at $35 per ounce. Thus, the U.S. dollar became the world's reserve currency.

The purpose of IMF is to consult with one another to maintain a stable system of buying and selling the currencies, so that payments in foreign money can take place between countries smoothly and timely.

The IMF lends money to members who have trouble meeting financial obligations to other members, on the condition that they undertake economic reforms to eliminate these difficulties for their own good and the good of the entire membership. In total the main tasks of the IMF are:

to promote international cooperation by providing the means for members to consult and collaborate on international monetary issues;
to facilitate the growth of international trade and thus contribute to high levels of employment and real income among member nations;
to promote stability of exchange rates and orderly exchange agreements, and [to] discourage competitive currency depreciation;
to foster a multilateral system of international payments, and to seek the elimination of exchange restrictions that hinder the growth of world trade;
to make financial resources available to members, on a temporary basis and with adequate safeguards, to permit them to correct payments imbalances without resorting to measures destructive to national and international prosperity.
To execute these goals the IMF uses such instruments as Reserve tranche which allows a member to draw on its own reserve asset quota at the time of payment, Credit tranche drawings and stand-by arrangements are the standard form of IMF loans, the compensatory financing facility extends financial help to countries with temporary problems generated by reductions in export revenues, the buffer stock financing facility which is geared toward assisting the stocking up on primary commodities in order to ensure price stability in a specific commodity and the extended facility designed to assist members with financial problems in amounts or for periods exceeding the scope of the other facilities.

Since 1978 free-floating of currencies were officially mandated by the International Monetary Fund. That is the currency may be traded by anybody and its value is a function of the current supply and demand forces in the market, and there are no specific intervention points that have to be observed. Of course, the Federal Reserve Bank irregularly intervenes to change the value of the U.S. dollar, but no specific levels are ever imposed. Naturally, free-floating currencies are in the heaviest trading demand. Free-floating is not the sine qua non condition for trading. Liquidity is also an indispensable condition.

A tool for people and corporations to protect investments in times of economic or political instability is currency reserves for international transactions. Immediately after the World War II the reserve currency worldwide was the U.S. dollar. Currently there are other reserve currencies: the euro and the Japanese yen. The portfolio of reserve currencies may change depending on specific international conditions, for instance it may include the Swiss franc.

The creation of the European Monetary Union was the result of a long and continuous series of post-World War II efforts aimed at creating closer economic cooperation among the capitalist European countries. The European Community (EC) commission's officially stated goals were to improve the inter-European economic cooperation, create a regional area of monetary stability, and act as "a pole of stability in world currency markets."

The first steps in this rebuilding were taken in 1950, when the European Payment Union was instituted to facilitate the inter-European settlements of international trade transactions. The purpose of the community was to promote inter-European trade in general, and to eliminate restrictions on the trade of coal and raw steel in particular.

In 1957, the Treaty of Rome established the European Economic Community, with the same signatories as the European Coal and Steel Community. The stated goal of the European Economic Community was to eliminate customs duties and any barriers against the transit of capital, services, and people among the member nations. The EC also started to raise common tariff barriers against outsiders. The European Community consists of four executive and legislative bodies:

The European Commission. The executive body in charge of making and observing the enforcement of the policies. Since it lacks an enforcement arm, the commission must rely on individual governments to enforce the policies. There are 23 departments, such as foreign affairs, competition policy, and agriculture. Each country selects its own representatives for four-year terms. The commission is based in Brussels and consists of 17 members.
The Council of Ministers. Makes the major policy decisions. It is composed of ministers from the 12 member nations. The presidency is held for six months by each of the members, in alphabetical order. The meetings take place in Brussels or in the capital of the nation holding the presidency.
The European Parliament. Reviews and amends legislative proposals and has the power to adopt or reject budget proposals. It consists of 518 elected members. It is based in Luxembourg, but the sessions take place in Strasbourg or Brussels.
The European Court of Justice. Settles disputes between the EC and the member nations. It consists of 13 members and is based in Luxembourg.
In 1963, the French-West German Treaty of Cooperation was signed. This pact was designed not only to end centuries of bellicose rivalry, but also to settle the postwar reconciliation between two major foes. The treat stipulated that West Germany would lead economically through the cold war, and France, the former diplomatic powerhouse, would provide the political leadership. The premise of this treaty was obviously correct in an environment defined by a foreseeable long-term continuing cold war and a divided Germany. Later in this chapter, we discuss the implications for the modern era of this enormously expensive pact.

A conference of national leaders in 1969 set the objective of establishing a monetary union within the European Community. This goal was supposed to be implemented by 1980, when a common currency was planned to be used in Europe. The reasons for the proposed common currency unit were to stimulate inter-European trade and to weld together the individual member economies in order to compete successfully with the economies of the United States and Japan.

In 1978, the nine members of the European Community ratified a new plan for stability—the European Monetary System. The new system was practically established in 1979. Seven countries were then full members—West Germany, France, the Netherlands, Belgium, Luxembourg, Denmark, and Ireland. Great Britain did not participate in all of the arrangements and Italy joined under special conditions. Greece joined in 1981, Spain and Portugal in 1986. Great Britain joined the Exchange Rate Mechanism in 1990.

The European Monetary Cooperation Fund was established to manage the EMS' credit arrangements. In order to increase the acceptance of the ECU, countries that hold more ECU deposits, or accept as loan repayment more than their share of ECU, receive interest on the excess ECU deposits, and vice versa. The interest rate is the weighted average of all the EMS members' discount rates.

In 1998 the Euro was introduced as an all-European currency. Here are the official locking rates of the 11 participating European currencies in the euro (EUR). The rates were proposed by the EU Commission and approved by EU finance ministers on December 31, 1998, ahead of the launch of the euro at midnight, January 1, 1999. The real starting date was Monday, January 4, 1999. The conversion rates are:
1 EUR = 40.3399 BEF
1 EUR = 1.95583 DEM
1 EUR = 166.386 ESP
1 EUR = 6.55957 FRF
1 EUR = 0.787564 IEP
1 EUR = 1936.27 ITL
1 EUR = 40.3399 LUF
1 EUR = 2.20371 NLG
1 EUR = 13.7603 ATS
1 EUR = 200.482 PTE
1 EUR = 5.94573 FIM
The euro bills are issued in denominations of 5, 10, 20, 50, 100, 200, and 500 euros. Coins are issued in denominations of 1 and 2 euros, and 50, 20,10, 5, 2, and 1 cent.


Factors Caused Foreign Exchange Volume Growth
Foreign exchange trading is generally conducted in a decentralized manner, with the exceptions of currency futures and options. Foreign exchange has experienced spectacular growth in volume ever since currencies were allowed to float freely against each other. While the daily turnover in 1977 was U.S. $5 billion, it increased to U.S. $600 billion in 1987, reached the U.S. $1 trillion mark in September 1992, and stabilized at around $1,5 trillion by the year 2000.

Main factors influence on this spectacular growth in volume are indicated below.

For foreign exchange, currency volatility is a prime factor in the growth of volume. In fact, volatility is a sine qua non condition for trading. The only instruments that may be profitable under conditions of low volatility are currency options.

Interest Rate Volatility
Economic internationalization generated a significant impact on interest rates as well. Economics became much more interrelated and that exacerbated the need to change interest rates faster. Interest rates are generally changed in order to adjust the growth in the economy, and interest rate differentials have a substantial impact on exchange rates.

Business Internationalization
In recent decades the business world the competition has intensified, triggering a worldwide hunt for more markets and cheaper raw materials and labor. The pace of economic internationalization picked up even more in the 1990s, due to the fall of Communism in Europe and to up-and-down economic and financial development in both Southeast Asia and South America. These changes have been positive toward foreign exchange, since more transactional layers were added.

Increasing of Corporate Interest
A successful performance of a product or service overseas may be pulled down from the profit point of view by adverse foreign exchange conditions and vice versa. An accurate handling of the foreign exchange may enhance the overall international performance of a product or service. Proper handling of foreign exchange generally adds substantially to the rate of return. Therefore, interest in foreign exchange has increased in the past decade. Many corporations areusing currencies not only for hedging, but also for capitalizing on opportunities that exist solely in the currency markets.

Increasing of Traders Sophistication
Advances in technology, computer software, and telecommunications and increased experience have increased the level of traders' sophistication. This enhanced traders' confidence in their ability to both generate profits andproperly handle the exchange risks. Therefore, trading sophistication led toward volume increase.

Developments in Telecommunications
The introduction of automated dealing systems in the 1980s, of matching systems in the early 1990s, and of Internet trading in the late 1990s completely altered the way foreign exchange was conducted. The dealing systems are on-line computer systems that link banks on a one-to-one basis, while matching systems are electronic brokers. They are reliable and much faster, allowing traders to conduct more simultaneous trades. They are also safer, as traders are able to see the deals that they execute. The dealing systems had a major role inexpanding the foreign exchange business due to their reliability, speed, and safety.


Computer and Programming Development
Computers play a significant role at many stages of conducting foreign exchange. In addition to the dealing systems, matching systems simultaneously connect all traders around the world, electronically duplicating the brokers' market. The new office systems provide full accounting coverage, ticket writing,back office processing, and risk management implementation at a fraction of their previous cost. Advanced software makes it possible to generate all types of charts, augment them with sophisticated technical studies, and put them at traders' fingertip on a continuous basis at a rather limited cost.
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FOREX AS A FINANCIAL MARKET

Foreign Exchange as a Financial Market

Currency exchange is very attractive for both the corporate and individual traders who make money on the Forex - a special financial market assigned for the foreign exchange. The following features make this market different in compare to all other sectors of the world financial system: heightened sensibility to a large and continuously changing number of factors; accessibility to all traders in the major currencies; guaranteed quantity and liquidity of the major currencies; increased consideration for several currencies, round-the clock business hours which enable traders to deal after normal hours or during national holidays in their country finding markets abroad open and extremely high efficiency relative to other financial markets.

This goal of this manual is to introduce beginning traders to all the essential aspects of foreign exchange in a practical manner and to be a source of best answers on the typical questions as why are currencies being traded, who are the traders, what currencies do they trade, what makes rates move, what instruments are used for the trade, how a currency behavior can be forecasted and where the pertinent information may be obtained from. Mastering the content of an appropriate section the user will be able to make his/her own decisions, test them, and ultimately use recommended tools and approaches for his/her own benefit.

Foreign Exchange in a Historical Perspective
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FOREX ve BORSA

Forex market günde 24 saat çalışmaktadır. Yatırımcılar, her zaman veya fırsat yaratılan herhangibir anda, gece dahil olmak üzere günün 24 saati trade yapabilir, alabilir veya satabilirler.

Dünya üzerindeki tüm borsalar belli zaman aralıklarında çalışmaktadırlar. Eğer gün içinde saat 9:30 ile 16:30 arasında çalışılıyorsa yada borsaya zaman ayrılamıyorsa günlük trade yapılamamakta ve genellikle yatırımcılar bu amaç için asıl işlerini bırakmak zorunda kalmaktadırlar

Forex market'te 5-6 major döviz cinsi işlem gormektedir ve özellikle bu dövizlerde trade yapılmaktadır. Bundan dolayıdır ki piyasanın, hissedilmesi, kontrol altında tutulması, hareket yönünün belirlenmesi kolaylıkla mümkün olmaktadır.

Forex market dünyanın en büyük piyasasıdır. Forex özünde büyük oyuncuların bulunduğu, bankalar, yatırım kuruluşları, büyük ölçekli şirketler ve finansal kuruluşlar için düzenlenmiş piyasadır. Şu anda Forex markette ne kadar özel yatırımcının bulunduğu bilinmemektedir.

Hisse senedi piyasasında bulunan milyonlarca profesyonel olmayan yatırımcı bu piyasalarda çok büyük etkiye sahip olup, kaosa sebebiyet veren alım satımlar yapabilmekte marketin çok keskin hareketler yapmasını sağlayabilmekte ve rahatlıkla spekülasyona sebebiyet verebilmektedirler.

Yatırımcı bir dövizi alarak yada satıp başka bir döviz alarak her zaman kazanç sağlayabilir. Ekonomilerin durağanlaşması yada büyümeye girmesi çok önem teşkil etmemektedir.

Hisse senedi piyasasında, sadece yükselen gelişen ekonomilerde kazanç yapmak mümkündür.

Ekonomik gelişim periyodiktir. Bu periyotlar gelişim ve durağanlık arasında gidip gelmektedir.Bu bağlamda hisse senedi piyasası durağanlaştığında yada aşağıya doğru giderken kazanç sağlamak mümkün olmamaktadır.

Sadece Forex markette diğer piyasalarda bulunmayan eşsiz bir özellik bulunmaktadır. Bunun adı " Demo hesap" tır. Bu sanal hesap;

Dealerlar tarafından yatırımcıya, piyasanın çalışmasını, emir özelliklerini, dealerların risk yönetimini, çalışma prensiplerini ve piyasanın özelliklerinin tanınmasını sağlamak amacı ile, teknoloji kullanılarak, cep telefonları, internet erişimi ve diğer multimedia kaynakları sayesinde herhangibir gerçek maddi kayba yada kazanca sebebiyet vermeksizin sağlanan ücretsiz, süreli hizmettir.

Hisse senedi piyasında ise işlemlere başlamadan önce ilk olarak yatırımcı kendi gerçek parasını yatırmak zorundadır.

Forex 21. Yüzyılın en akılcı , en adil ve en etkili piyasasıdır !
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WHAT IS FOREX?

The vast currency market is a foreign concept to the average individual. However, once it is broken down into simple terms, the average individual can begin to understand the foreign exchange market and use it as a financial instrument for future investing.

Whether or not you are aware, you already play a role in the foreign exchange market, also known as the Forex market. The simple fact that you have money in your pocket makes you an investor of currencies, and more particularly, an investor of U.S Dollars! The cash in your wallet and money in your savings account are in U.S. Dollars. The value of your mortgage, stocks, bonds, and other investments are expressed in U.S. Dollars. In other words, unless you are among the few Americans who have foreign bank accounts or have bought a modest amount of foreign currencies or securities, you are an investor of U.S. Dollars.

By holding U.S. Dollars, you have basically elected not to hold the currencies of other nations. Your purchase of stocks, bonds, and other investments, along with money deposited into your bank account represent investments which rely heavily on the integrity of the value of the currency in which it is denominated---the U.S. Dollar. Due to the increasing and decreasing value of the U.S. Dollar and the resultant fluctuation in exchange rates, your investment portfolio may have experienced changes in value, thus affecting your overall financial status. With this in mind, it should be no surprise that many shrewd investors have taken advantage of the fluctuation in exchange rates using the volatility of the foreign exchange market to trade currencies and put more money in their pockets.

The foreign exchange market has experienced many changes since its inception. For years, the United States and its allies, under the Bretton Woods Agreement, participated in a system in which exchange rates were tied to the amount of gold reserves belonging to the nation. However in the summer of 1971, President Nixon took the United States off the gold standard, and floating exchange rates began to materialize. Today, supply and demand for a particular currency, or its relative value, is the driving factor in determining exchange rates. Decreasing obstacles and increasing opportunities, such as the fall of communism and the dramatic growth of the Asian and Latin American economies have created new opportunities for investors.

Increasing trade and foreign investment have made the economies of all nations more and more interrelated. Regularly reported economic figures around the world, such as inflation or unemployment levels, as well as unexpected news, such as natural disasters or political instability, alters the desirability of holding a particular currency, thus influencing international supply and demand for that currency. The U.S. Dollar, therefore, fluctuates constantly against the currencies of the rest of the world. The current web of international trade and the resultant fluctuations in exchange rates have created the world's largest market---the foreign exchange market, a market whose vast size makes it the most efficient, fairest, and liquid of all markets.
The foreign exchange market is a cash interbank or interdealer market. Foreign exchange, however, is not a "market" in the traditional sense since there is no centralized location for trading activity. Trading occurs over the telephone and through computer terminals at thousands of locations worldwide. The direct interdealer market consists of dealers with currency settlement capabilities trading as principals. It is this dealer segment of the market that is responsible for generating a large portion of the overall foreign exchange volumes. Trading between dealers creates the largest turnover in the market, making foreign exchange the most liquid of all markets.

Trading approximately $1.5 trillion every day, the foreign exchange market is the largest financial market in the world. Traditionally, the foreign exchange market has only been available to banks, money managers, and large financial institutions. Over the years, these institutions, including the U.S. Federal Reserve Bank, have realized large gains via currency trading. This growing market is now linked to a worldwide network of currency traders, including banks, central banks, brokers, and customers, such as importers and exporters. Today, the foreign exchange market offers opportunities for profit not only to banks and institutions, but to individual investors as well.
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ULTIMATE

Bilinen osilatörler genellikle hisse senedinin fiyatını, daha önceki (mesela x periyod önceki) fiyatları ile karşılaştırırlar. Larry Willams bu tip osilatörlerin alınan zamana göre çok değişkenlik gösterebileceğini söyledi ve bundan dolayı da, değişik zaman periyodlarındaki üç değişik osilatörün ağırlıklı toplamını kullanarak Ultimate Osilatörü geliştirdi.

Ultimate Osilatörünün parametreleri aşağıda gösterilmiştir. Bu parametreler indikatörün çizildiği zaman periyodunu belirtir.

Birinci Periyod: Kısa vade zaman periyodu sayısı

İkinci Periyod: Orta vade zaman periyodu sayısı

Üçüncü Periyod: Uzun vade zaman periyodu sayısı

Yorumlanması

Williams, Ultimate osilatörün uyumsuzluklarına ve Osilatör trendinin kırıldığı noktalara göre işlem yapmayı önerir.

Bir boğa piyasasında hisse senedi fiyatları yeni tepeler yaparken, bu durum osilatör tarafından daha yüksek tepeler oluşması yoluyla teyid edilmez. Bir ayı piyasasında ise, hisse senedi yeni dipler yaparken, osilatör bu durumu yeni dipler yaparak teyid etmez. Her iki durumda da, mevcut trendin değişebileceği düşünülmelidir.


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TREND ÇİZGİLERİ

Charles Dow'un Dow Teorisinin temel prensiplerinin en önemlisi, hisse senedi fiyatlarının bir trendinin olmasıdır. Trend çizgileri, grafikteki iki veya daha fazla uç nokta birleştirilerek gösterilir. Yükselen trendler iki veya daha fazla dip noktanın birleştirilmesi ile çizilir ve destek seviyelerini gösterir. Alçalan trendler ise, iki veya daha fazla tepe noktası birleştirilerek çizilir ve direnç seviyelerini gösterir.

Yorumlanması

Bir trend çizgisi, grafik üzerinde uç noktaların birleştirilmesi ile çizilen eğim çizgileridir. Yükselen trend çizgileri fiyat destek seviyelerini gösterirken, alçalan trend çizgileri fiyat üst direnç seviyelerini göstermektedir.

Bir trend oluşunca piyasada, trend çizgisi kırılıncaya kadar geçerli olacak bir konsensus oluşmuş demektir.

Bu çok basit gibi görünür. Önemli olan mevcut trendi, trend çizgisini kullanarak belirlemek ve bu trend kırılıncaya kadar işlem yapmak veya mevcut trendin kırılmasına kadar bekleyerek, yeni oluşan trende göre işlem yapmaktır.

Aşağıdaki grafikte iki trend çizgisi gösterilmektedir. İlki " alçalan" trend çizgisidir. Bu çizginin tepeler kullanılarak çizilmiş olduğuna dikkat edin. İkincisi ise, " yükselen " trend çizgisidir. Bu da diplerden geçecek şekilde çizilmiştir.



Trendlerin en önemli faydası, içgüdüsel kararları ( satma vakti geldiğini düşünüyorum ) analitik kararlardan ( yükselen trend kırılıncaya kadar bekleyeceğim) ayırmaya yardımcı olmasıdır. Bir diğer yararı ise, daima piyasanın doğru tarafında durulmasını sağlamasıdır
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