When you trade, you will always trade a combination of two currencies. For example, you will buy US dollars and sell euro. Or buy euro and sell Japanese yen, or any other combination of dozens of widely traded currencies. But there is always a long (bought) and a short (sold) side to a trade, which means that you are speculating on the prospect of one of the currencies strengthening in relation to the other.

The trade currency is normally, but not always, the currency with the highest value. When trading US dollars against Singapore dollars, the normal way to trade is buying or selling a fixed amount of US dollars, i.e. USD 1,000,000. When closing the position, the opposite trade is done, again USD 1,000,000. The profit or loss will be apparent in the change of the amount of SGD credited and debited for the two transactions. In other words, your profit or loss will be denominated in SGD, which is known as the price currency. As part of our service, Saxo Bank will automatically exchange your profits and losses into your base currency if you require this.

Trade Balance

The trade balance is a measure of the difference between imports and exports of tangible goods and services. The level of the trade balance and changes in exports and imports are widely followed by foreign exchange markets.

The trade balance is a major indicator of foreign exchange trends. Seen in isolation, measures of imports and exports are important indicators of overall economic activity in the economy.

It is often of interest to examine the trend growth rates for exports and imports separately. Trends in export activities reflect the competitive position of the country in question, but also the strength of economic activity abroad. Trends in import activity reflect the strength of domestic economic activity.

Typically, a nation that runs a substantial trade balance deficit has a weak currency due to the continued commercial selling of the currency. This can, however, be offset by financial investment flows for extended periods of time.

Foreign Exchange Margin Trading elementary knowledge

Currency name	Commonly used currency code
Singapore dollar Thai Bath Swedish krona Danish Krone Norwegian krone Spanish peseta German Mark US dollar Euro Japanese Yen Pound Swiss franc Australian dollar New Zealand Yuan Canadian dollar Hong Kong dollar French franc Italian lira Belgian franc	SGD THB SEK DKK NOK ESP DEM USD EUR JPY GBP CHF AUD NZD CAD HKD FRF ITL BEF

The Foreign Exchange margin trading meaning the traders borrow loan from bank, finance organization or broker house to carry on the foreign currency trading. Generally, the financing proportion is above 20 times, which means the Forex traders’ fund may enlarge to 20 times to carry on the trading. The bigger the financing proportion, means the Forex traders just need to pay very less fund, for example, the financing proportion provided by the financial organization is 400 times, namely the lowest margin request is 0.25%, the traders just need to pay 25 US dollars, then he or she could trade as high as 10,000 US dollars, fully using the contra method to make big profit by only paying a very less price.
Besides the fund enlargement, another attraction of the Forex margin trading method is that it can be traded in both ways, you can make profit by buying the currency when the currency rise (makes many), or to sell a currency when the currency is dropping to make profit (short-selling), thus does not need to be restricted by the restriction so-called bear market is unable to make money.
Making Profit in the Foreign Exchange Market
The currency fluctuate continuously due to reasons such as political, economical reasons, sometimes the changes could be extremely great, therefore, the Forex traders also can have the opportunity in among which makes a profit. For example, the Japanese Yen daily fluctuation is probably between 0.7% to 1.5%, Forex traders may make profit through buying and selling. All trading could be completed in a short time, the trading strategy could be carry up according to the market conditions, it is extremely flexible, even if the direction looks wrong, the lost could be stop immediately, the lost could reduce but profit potential is still great. Therefore, the Foreign Exchange margin trading is the most flexible and the most reliable investment method.
Foreign Exchange Margin Trading elementary knowledge.

Currency Trading in Pakistan.

The online forex Currency Trading market is one of the most profitable markets for consideration, due to its still vast untapped potential, huge size, liquidity and tendency for currencies to move in strong trends. Even in these days of tough budgets, economic recession and the downsizing, more and more people are drawing towards exploring this niche market. The promising opportunities enable investors to have tremendous success. However, success has been limited mainly due to dearth of discipline, training and guidance.

There are numerous online services and products out there and instead of helping people, they are creating a mess. So people now want to have a guide about online forex currency trading, and Fab Forex is the answer. Whether you are coming from a forex currency trading industry or you are a novice in Forex Currency and want to learn about it, then without any question, the market leader Fab Forex is your natural stop. What makes Fab Forex, the guide of choice regarding online forex currency trading extremely attractive is proven professional expertise scattered throughout their site.

Now you don’t have to roam the confusing and messy corridors of online currency trading. You don’t have to hire a consultant or expert to answer your queries about this field or help you out in making profit out of it. Now you are your own boss with the properly researched and dedicated information presented at the fabforex.com.

U.S. Dollar Could Gain From Speculators Looking For Failing Banks

Friday was “Stress Test Day” and the 19 major banks analyzed by the Fed received the preliminary results of the recent stress tests performed by the top bank. These results will let the banks know what they need to do to achieve stability and where they are at risk. Some will be told they need capital now. Others will be informed of future situations where they would need to shore up capital requirements.

Only preliminary results were released with the actual results coming out on May 4. It is kind of like getting a report card from your teacher and having 10 days to fix the grades before your parents get to see it. Of utmost importance is secrecy at this time. The Obama Administration does not want the release of these preliminary reports leaked in order to prevent excessive speculation in a bank’s stock or a run on a bank.

This 10-day period before the release of the actual numbers is to prevent a shock to the banking system. Of course speculation over who is sound and who is in trouble may plague the markets from now until May 4, but that is why we have markets. There seems to always be someone willing to take the risk.

If the numbers are too good then no one will believe the Fed. If the numbers come out bad then investors may head for the hills. Either way the next 10 days are likely to be some of the most volatile we’ve seen since the fall 2008. There is likely to be speculation on both sides of the market. At times the herd will chase the good bank stocks and repel the bad bank stocks. The only thing that is certain is that no one will know the exact results from the stress tests until May 4. Any moves that take place before then will be all speculation.

The banks received their preliminary reports early in the day while the Fed waited until late to say that the top 19 U.S. banks need to hold a “substantial” amount of capital above regulatory requirements. The use of the word “substantial” is where the speculation is likely to begin. What is substantial and which banks meet this requirement will be the questions asked by many traders and investors over the next 10 days.

Since the U.S. Dollar is still the world’s reserve currency and the markets remain sensitive to banking issues, the Greenback could see quite a lot of buying if there are any signs of new banking sector trouble. One of the major concerns among traders will be that one or more of the larger U.S. banks receives the scarlet letter and gets deemed a failure.

Theory of International Trade

With international trade, as with so many other human interactions, people tend first to ask how it 'should' work before getting interested in how it 'actually' works.

The systematic study of international trade emerged in the era of mercantilist economics--- approximately the 16th through 18th centuries in Europe, as crude set of hypothesis about how nations should conduct their trade. It was felt that each nation's self-interest was served by encouraging its exports and discouraging its imports. The mercantilist view began to yield, after the late 18th century, to a free-trade view, a view arguing that a nation's self-interest would both be served best by just letting people buy and sell as they saw fit.

The main hypothesis continued to be one about how trade should be conducted.

Economists studying trade soon found that the issue of what trade policy was best could not be resolved until there was a firmer theory of what made trade flow in the directions it did. On the surface level, the answer might seem obvious: people will trade if they find it privately comfortable, but profitable for whom, for everybody?

If not for everybody, then how do we know that the gains given to some people compensate the losses it brings to others? If one country gains from trade, does it drop its trading influence? These immediate questions illustrate that the answer to what should be cannot be divorced for the task of explaining what was in question though. We cannot know how a nation or an economic group within a nation gains or loses from trade until we know what makes some people find trading profitable, and what goods they will do business on, if given the chance.

To put the point in terms of the recurring concern felt in the United States about trade with Japan: knowing is impossible who would gain or lose, by cutting down the deal with the latter until we know why its is that Japan sells steel, autos, and other merchandise to the United States in exchange for aircraft, grain, and such.

Only when we know why trading proves advantageous and whose profits are tied to trade, can we discern who would be affected by policies restricting it. The basis for trade, so far as supply is concerned, is found in differences in comparative costs. A country may be more efficient than another, as measured by factor inputs per unit of output, in the production of every possible commodity; but so long as it is not equally more efficient in every product, a basis for trade exists.