Reuters  Nov 24  Comment 
TMK, Russia's largest maker of steel pipes for the oil and gas industry, said on Tuesday it made a net loss of $74 million in the third quarter due to a $94 million hit from adverse foreign exchange rate moves.
The Hindu Business Line  Nov 24  Comment 
Technical forex report for Nov 24, 2015 by Veracity Financial Services
The Economic Times  Nov 24  Comment 
The Malaysian ringgit led gains among emerging Asian currencies as a rebound in crude prices eased concerns over the country's falling oil and gas revenues.
SeekingAlpha  Nov 23  Comment 
Benzinga  Nov 23  Comment 
The New York Attorney General's office is investing possible foreign-exchange manipulation. Brokers are suspected to be engaged in "spoofing," whereby orders to buy or sell are entered into the market with the intent of being canceled prior...
Financial Times  Nov 23  Comment 
ICAP, BGC, Tullett and GFI subpoenaed in new trading investigation
Yahoo  Nov 23  Comment 
New York Attorney General Eric Schneiderman's office is investigating the posting of false bids and offers in the foreign exchange options market for emerging market currencies, a person familiar with ...
The Economic Times  Nov 23  Comment 
Most emerging Asian currencies slid on Monday as the dollar hit a seven-month peak against major currencies with expectations of further easing in Europe.


Looking for Forex Trading Strategies? Check out the Forex Trading page


Forex (FX) is short for foreign exchange and refers to the trading of one currency for another. Unlike stocks or futures, currency trading is an over-the-counter market with no central exchange.

Currencies typically trade in pairs such as the EUR/USD or USD/JPY. Currencies common to Forex tend to be the most liquid currencies such as the U.S. Dollar (USD), Japanese Yen (JPY), Euro (EUR), British Pound (GBP), Swiss Franc (CHF), Canadian Dollar (CAD), and Australian Dollar (AUD).

FOREX[1] is the world's most traded market with an average daily turnover of USD $3.2 trillion[2].

Trades occur 24 hours a day, starting Monday morning in the Asia-Pacific region and ending Friday evening in North America.

Common FX Practices

Corporate FX Programs

Many corporations who receive a significant portion of their revenue from overseas (overseas refers to any sites outside of the chartering country - "headquarters") may wish to participate in FX Hedging. This is primarily because currency volatility can majorly effect a company's stated income. A long-winded example is below.

Say Google receives more than 50% of its revenue from outside the United States. This creates a situation in which the relative strength of the U.S. Dollar (USD) can impact its financials. If the Euro (EUR) strengthens against the dollar, it has a net positive impact on Google's income statement. If EUR/USD decreases, meaning more USD can be bought with 1 EUR, then when the company calculates the value of its EUR-denominated revenue, it will see a higher than average USD amount. Forex

Retail FX

In the last several years, the Retail FX market has opened up substantially with the spread of the internet and online trading. This segment is said to occupy about 4% of all forex transactions and is growing rapidly. One of the main reasons for this phenomenon is the simplified trading platforms like TradeStation that were recently developed by innovative internet brokers, aiming to educate the lay person and help get into this lucrative market.

Example with Fake Numbers and no Transaction Costs

Let's say, for ease of demonstration, that 1 EUR = 2 USD, or that 1 Euro can purchase 2 U.S. Dollars (this is not the case, but it's easy math). Furthermore, we can claim that Google makes 1 million Euros in December 2008 in France. If Google recognizes that revenue in USD, we'd say that Google made 2 million dollars that month (from France). Suppose, however, that the Dollar strengthens against the Euro, and instead we get 1 EUR = 1.5 USD (USD appreciates, which means that 1 Euro now buys less than before). This would instead result in 1.5 million dollars for December, instead of the previous 2 million.

On your own, try seeing what would happen if the USD weakens against the Euro (1 EUR = 3 USD). This volatility is something that most companies desperately seek to avoid. One can probably see already, the more money at risk, the greater the trading activity. Vis-à-vis, the more currencies that impact revenue, the greater the trading activity. As a result, these companies engage in all sorts of Hedging practices, including using currency swaps and Derivatives (Options, Futures, and forwards), to limit their exposure to currency movement, especially for the primary currencies as listed above.

Example Currency Pairs

U.S. Dollars to Euros

Euros to U.S. Dollars

U.S. Dollars to Canadian Dollars

Canadian Dollars to U.S. Dollars

U.S. Dollars to Japanese Yen


  1. FOREX
  2. Forex 101
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