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The Forex markets ......

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Re: The Forex markets ......

Postby Maximus » Fri Feb 24, 2017 10:43 pm

"Where the F is Soros?"

"Last I heard sir, he was campaigning against Tobin's tax?"
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Re: The Forex markets ......

Postby Pyrpolizer » Fri Feb 24, 2017 11:23 pm

Robin Hood wrote:But you can exclude transactions from normal commercial buying of goods and services, simply because there is an end consumer when you convert money into goods ..... the goods represent something of value.


Like Maximus said, the Forex transactors are mainly the Banks.The buyer of real goods and services doesn't do any Forex transactions himself, he just buys the foreign currency he needs from the Banks. If you impose a tax on forex transactions then obviously the one who will pay that extra cost is the buyer of foreign goods. And unfortunately it will not be on a 1:1 basis but probably 10:1 because the Banks need to switch from one F currency to another multiple times to get the best they can. So a 0.1% tax on every transaction might end up to 1% extra cost to the buyer of real goods and services.

Also imo the tremendous increase of Forex transactions in the last 20-30 years isn't anything to worry about. It's just because an old tiring job got easier and faster through computers. It just helps making exchange rates more realistic, and the Banks more competitive to each other. I doubt there are huge profits from these transactions.The reason is because just like every other commercial activity the easiest thing anyone can do is to buy something. Try selling it with a profit and you will see how "easy" it is. :wink:
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Re: The Forex markets ......

Postby Paphitis » Sat Feb 25, 2017 4:03 am

You silly buggers.

Forex transactions are also your average consumer who decides to buy something off Ebay using their credit card.

The Bank facilitates this transaction by converting currency from your country to the other country from where you are buying goods and services, and the banks charge a nominal surcharge for it as well, also known as Exchange rate. That's because FOREX charge your Bank and your bank needs to cover that and add their 1% on top or margin.

Currency traders are different again. They trade in currency. good old fashion Supply and Demand. if the USD is in high demand, it will go up, if there is a sell off it will go down. that is the underlying principle but there are other factors influencing things such as Current Account deficits, Unemployment rates, Price of Gold, Commodity prices, and Price of Oil and many many more things as well.

but you can usually pick it too, because currencies generally follow a particular pattern. You can normally detect the bottom out pretty accurately and also predict the peak just by looking at the recent history and graphs. They are pretty much constant baring any cataclysmic earthquake on the San Andreas, fault line, a terror attack or War which make it impossible to predict. Uncertainty is always a killer and where people lose money.

the biggest problem for traders is uncertainty, like BREXIT for instance, or TRUMP coming into office which is why you see big movements as a result of sell offs and market jitters. In those circumstances, you can also see Gold goes UP! So traders always have an opportunity to make money. You just need to have finger on pulse and know when to jump from USD to Pounds, or EUROS and when to buy AUD and when the shit hits the fan buy Gold, Silver or Platinum.

Right now, its all about the USD because of TRUMPonomics. Or Gold depending on how you look at things.

BTW, everyone of us play this game and speculate. The EXACT same principles apply to land and real estate and most of us have bought and sold property before. If there is high demand, you will pay through the nose to buy property. if demand is low, then you should get a bargain.

The idea is to buy a bargain and only sell at the peak so that you can make a nice little gain for yourself. Same principle, just different asset class.

But even without even knowing it, we also trade in currency every-time we buy something off the net. it facilitates trade and investment around the world.

it's a fantastic little system, which keeps the world spinning.

These things make many things possible, and allow the astute many opportunities in life. you don't even need to be wealthy, just a bit astute and willing to have a go. Everyone does it to their own pocket as well, such as when you buy some shares into a company. Now imagine you like buying International Shares in UK, or USA or other European countries. so many Blue chip options available such as Microsoft, Rolls Royce, Mercedes, Apple, Boeing, Airbus (you name it). well what you are effectively doing is not only trading in shares, but you are trading in currency so you better look at the currency markets and see the trends, because it is completely possible to make a gain on the share price but lose on the Exchange or triple your share gain whenever you factor a big currency movement like what occurred at BREXIT. it's like the cream on top of the cake. But if it goes bad, then you just can't covert back to your own currency and are stuck for a while. That's because you ONLY realize your losses when you finalize the transaction. If you keep the currency you initially changed to, then your losses are ONLY on paper.

The other cool thing is this, if you realize your losses, you can completely tax deduct them too and not pay tax even. No one knows more about TAX than Trump does. :lol:

Pretty damn cool huh? 8)
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Re: The Forex markets ......

Postby Paphitis » Sat Feb 25, 2017 4:33 am

Basically, the rule of thumb is to follow the money and we can all see where the money is fleeing from and where it is going to. Where bulk money goes to (banks and Institutional Investors), is where you could potentially make money.

banks only get it wrong when something stupid happens like a major terrorist attack like 9/11 or where BREXIT actually wins or when TRUMP wins when they were not expecting it and the Banks normally hate untried and untested gambles and things like that because they get nervous and that's when the market's tumble because they are pulling their money out and probably buying Gold.

And indirectly, millions of people are on the Bandwagon too like for instance if you own shares in a bank etc. You are going along for the ride and 9 times out of 10 it should work out for you provided the San Andreas fault line doesn't go off or something like that.

You can see the volumes and the inflows and outflows of cash (electronic money) all the time. And it's live as well.

people even buy swanky and expensive computer programs where you can actually program your entry and exit and the computer trades for you AUTOMATICALLY with money going in and out of your own linked trading account. You don't even need to lift a finger, just enter your entry price and your exit price.

The banks have these programs as well, only difference is their programs are a lot more expensive, solid have better features and analysis software. The software even studies algorithms and probabilities as well as look at the Futures market and give you recommendations based on that. There isn't a great conspiracy here, just banks, Institutions and even people using some clever tools of the trade to maximize their chances. These softwares are also linked to investment houses, via the internet for a nominal monthly fee where there are advisers giving you the ins and outs of a particular trade you're about to execute. So you are effectively linked to other investors who discuss certain trades and often pool their buying power together which apparently is said to influence the market as well in your favour.

you can also program the software to alert you of a major movement in currency, share prices for nominated stocks, gold, oil and other commodities (if it interests you) and also get alerts of major transactions exceeding a particular amount and see where the money is fleeing from and where it is fleeing to.

I only know this because I have a mate who has an entire basement devoted to this. he has about 5 network computers and everything linked to tablets as well, with alerts going in and out whenever his software just traded some money on his behalf. You could be having dinner with him and he will excuse himself because some stock market around the globe is about to open or something. :lol:

he normally does currency. he isn't rich either. But well off I would say. Just well off or well to do. :wink:

And he normally etches a reasonable profit out of it too. Enough to keep him home as a house husband and watching "Day's of our Lives" etc etc or on the Golf Course without having to go to work. 8)

And here is the DISCLAIMER: you can get your fingers burnt too and lose money and sometimes lots of it. so it aint for the faint hearted or for anyone who doesn't spend a lot of time and effort studying even the most minute detail. You have to study a lot of boring graphs, watch Bloomberg and CNBC and just be very well informed with international news and events as well. Yes you can lose money off transactions and enough to bring a tear to your eye.

but these guys just play the numbers. they know how to win 8 and lose 2 and they mathematically formulate and factor their loses and hedge themselves with diversification.

It's not something I would recommend anyone get involved with unless they are willing to put in a HUGE effort. These guys do actually put in a lot of hours even at all hours of the morning plying their trade. they have made a job out of it for themselves and their family relies on it and so far it's been paying the bills for him as well as private Schools etc etc.

IT"S NOT EASY! Otherwise everyone would be doing it.

The closest thing I can compare it too, is a gigantic computer game that is 24/7 and interactive. Thrilling when you make a profit but absolutely shit when you don't.

the other thing you have to be real good at is to not take anything to heart or personally. You need to be able to roll with the highs and also with the punches. If you can't emotionally detach yourself, then forget it. You got know chance because you will make stupid decisions. that's why the banks are very good at it. They are just workers monitoring graphs and applying all the rules of thumbs and when they lose a few million, they don't care and just move to the next one.

It's extremely fast, and at times volatile. Volatility can be your friend or enemy depending what side of the fence you fall on. Volatility just means you can make a bit of money or lose it. Fluctuations of 1% happen on most days.

now imagine you move $500K around. well that's a $5K profit in one day. Not many people earn that much in a day or even within a few minutes.

Likewise, they can lose $5K relatively easy and even within seconds, but what they do is they use their software to program a STOP LOSS of 1% so when they hit that, the computer bails out of the trade and sells off like everyone else thus limiting your loss to 1%. They take this as par of the course and they expect it to occur every so often.

So basically, what they do is:

Set a STOP LOSS of -0.01 or -1%
set a Sell price at + 0.01 or +1%.

They achieve the +1% more than they STOP LOSS hence turn a profit.

Sometimes the currency actually fluctuates between the STOP LOSS and SELL price where they are in limbo and they can be in limbo for anywhere between 1 day and a few days.
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Re: The Forex markets ......

Postby miltiades » Sat Feb 25, 2017 10:59 am

Any predictions as to where STG will be against the EURO on April 1st 2017.?
This is a serious question and serious answers please.
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Re: The Forex markets ......

Postby Paphitis » Sat Feb 25, 2017 11:01 am

miltiades wrote:Any predictions as to where STG will be against the EURO on April 1st 2017.?
This is a serious question and serious answers please.


No!

You need to study it and making decisions this far out is like a gamble.

it could go anywhere. It could even go up.

it depends on how the markets feel about it and they already had a major correction and over reaction too.

the best bet is to probably not do anything and don't try to speculate on big events like this. Too volatile.

everyone will probably go to the safe havens for a bit which means it might go down.
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Re: The Forex markets ......

Postby miltiades » Sat Feb 25, 2017 11:11 am

Paphitis wrote:
miltiades wrote:Any predictions as to where STG will be against the EURO on April 1st 2017.?
This is a serious question and serious answers please.


No!

You need to study it and making decisions this far out is like a gamble.

it could go anywhere. It could even go up.

it depends on how the markets feel about it and they already had a major correction and over reaction too.

the best bet is to probably not do anything and don't try to speculate on big events like this. Too volatile.

everyone will probably go to the safe havens for a bit which means it might go down.

Something tells me I should convert my STG to Euro rather soon, a gut feeling I have is that STG is going to go way down by the end of March once A50 is triggered ! I have a horrible feeling that this might be well on the cards.
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Re: The Forex markets ......

Postby Paphitis » Sat Feb 25, 2017 11:15 am

miltiades wrote:
Paphitis wrote:
miltiades wrote:Any predictions as to where STG will be against the EURO on April 1st 2017.?
This is a serious question and serious answers please.


No!

You need to study it and making decisions this far out is like a gamble.

it could go anywhere. It could even go up.

it depends on how the markets feel about it and they already had a major correction and over reaction too.

the best bet is to probably not do anything and don't try to speculate on big events like this. Too volatile.

everyone will probably go to the safe havens for a bit which means it might go down.

Something tells me I should convert my STG to Euro rather soon, a gut feeling I have is that STG is going to go way down by the end of March once A50 is triggered ! I have a horrible feeling that this might be well on the cards.


you have to figure that out yourself.

i am not an expert on it and wouldn't even try to guess it.

You need to look into it and study it. if the punters on Bloomberg and CNBC see a downside, then chances are it will go down.

but the EURO isn't a secure currency of choice given all the volatility with pending FREXIT. The Euro is also in the doghouse. you could be jumping out of the fry pan and into the fire.

Probably look at USD or even AUD because commodities are heading up. That'[s no recommendation from me either, but if you are looking for an OUT, then you would be crazy not to look at the USD or AUD. they are far more solid than the Euro atm.

Too much uncertainty with Euro. if marie le pen wins in France, then you just don't know what will happen with Euro.

In fact, I recommend you don't do a damn thing. it's friggin dangerous to start chasing this. Hopefully any fluctuations will only be between 2 to 3%.
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Re: The Forex markets ......

Postby Tim Drayton » Sat Feb 25, 2017 11:32 am

There is a theory in the investment world that Sterling will dip to one further low after article 50 is triggered, and then this will be the time to move into Sterling assets, because it will then recover from this low. Just a theory, though.
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Re: The Forex markets ......

Postby miltiades » Sat Feb 25, 2017 11:38 am

Brexit has had an adverse affect on STG , triggering Article 50 will undoubtedly drive STG down further against most currencies. One of course could say that the markets have already discounted this knowing that Brexit and A50 will happen. The prospects for the UK economy do not exactly look rosy once out of the single market. I have always believed that abandoning the EU is a big mistake that will have dire consequences for the UK economy, I do hope that Im wrong.
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