hello,

im trying to understand what causes forex prices to change from second to second?

what is confusing me is that when you buy or sell a curency pair, you are dealing directly with whatever fx trading company you are using, and not with another trader via the fx company acting as a broker would do as with stocks traded at a regulated exchange.

could the fx trading company manipulate the spread or 'mis-quote' prices and quite easily rip you off?

is there some kind of arbitrage that keeps prices fairly even from one fx trading company to another?

hope my questions make sense and thanks for your help.

Answer
Your questions make perfect sense.

Of course, there are scams in every industry, but if you talk to other traders, this can be avoided. I've used FXCM for several years without any problems. FXDD, on the other hand, wouldn't execute my market orders when I would clearly make a profit, and would often go Sniping and hunting for stops near pivot points. Obviously, no broker admits to committing these acts. There is no blacklist or organization that reports such activity.

I always use a backup quote system with a different broker in case of problems. I'm not aware of any misquoting prices. First, if they purposefully misquoted or manipulated prices to their clients, they would be committing fraud and risk their entire business to make pennies. Second, it wouldn't be that hard to catch, and they wouldn't be in business very long anyway.

Forex is the biggest financial market in the world, with over $4 trillion worth of transactions occurring every day, and currencies are traded worldwide among the major financial centers of London, New York, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris and Sydney. This means, at any time during the day you can find a financial center that is buying and selling currencies.

You must know that all of these financial centers are all interconnected, and as the NYSE is the financial center for stocks, London is the financial center for currencies. As the workings of these forex financial centers are not public nor overseen by any gov't agency, I do not know personally the exact method for "keeping prices fairly even" throughout the world, but I would guess it is through computer algorithm and/or arbitrage, just like in the stock and bond markets. As an individual trader, I know better than to waste my time or my chump change to find pennies of arbitrage opportunity. But I also know that every developed country is watching the currency of every other country and these checks and balances make sure that things run smoothly.

What Moves A Currency?
http://www.investopedia.com/walkthrough/forex/getting-started/currency-movers.aspx#axzz2NEwVuVLc

The primary mover of price is supply and demand, but also the perception of economies, trends, and policy, like any other market. Some commodity markets have plagues and pestilences, the currency markets have politicians, debt, and interest rates as the unknown antagonists.

Ten years ago it was fun to trade forex. Now it is a crisis/interventionist market, and is no longer a free market. Trying to guess what a politician will do next is impossible, and trading forex has become all the more difficult.

Forex and Stock Trading Computer?

I'm trying to setup a multiple monitor trading computer. Could some body please let me know what my options are. I would like to use four screens on one computer. Thanks!

Answer
The Three main ways to Setup Multiple Monitors

1) You can buy a pre-manufactured multiple monitor computer. The best place to purchase a multiple monitor computer is at: http://Multi-Monitors.com. They carry a multi-monitor computer line called SUPER PC that can support from 2 to 12 monitors (or more if you ask).

http://www.multi-monitors.com/SUPER_PC_Multi_Monitors_com_Multi_Screen_Computers_PCs_s/23.htm

http://www.multi-monitors.com/SUPER_PC_Multi_Monitors_com_Multi_Screen_LCD_Displays_s/21.htm

2) You can get a USB to VGA Adapter, or USB to DVI Adapter that will allow you to add an extra monitor to your computer via any USB2.0 Port. You can also add multiple extra monitors by using multiple adapters. This is a great option for viewing documents, surfing the web, using Microsoft Office and many other business tasks. This is not a good option for intense graphical situations such as HDTV, Blu-ray, Gaming and 3D / CAD Workstation applications. For those types of scenarios, it is highly recommended that you purchase a high-powered multi-monitor workstation or a Matrox Dual or Triple Head2Go.

http://www.multi-monitors.com/SUPER_PC_Multi_Monitors_com_Multi_Screen_USB_Adapters_s/22.htm

3) You can replace or add an extra video card to your existing computer, depending on how many monitors you wish to support. Although this sounds easy enough, this is a rather complex solution for a beginner, especially when trying to find a compatible graphics card. For this reason, I am going to write an entirely seperate post on that topic and will link to it here, very soon.

http://www.multi-monitors.com/category_s/1914.htm

Once you have your multiple monitor system set up and ready to use, you will need to enable all of your monitors in your âDisplay Propertiesâ Control Panel. Here is a great link to a complete and animated walkthrough of how to enable your multiple monitors in Windows.

How to Setup Multiple Monitors (Instructions)

http://www.multi-monitors.com/SUPER_PC_Multi_Monitor_Computer_Setup_Instructions_s/40.htm

This is what it will look like when you are done:

http://www.youtube.com/watch?v=j_avGStqZOI
http://www.youtube.com/watch?v=1AR7WDpCXj4