Answer
Forex trading is the buying and selling of currencies. Investopedia had a good definition (and video!) Here:

http://www.investopedia.com/terms/f/forex.asp#axzz25QAKIlz9

The differences between Forex and Futures?

Answer
Hypersignal is pretty confused:

a) Forex more liquid than futures
Hmm, well I am sure that the retail forex sites that he trades tells him this, but the $4T figure that he mentions is a different market than the one he is trading. That's the Interbank market that he doesn't have access to. You can trade Forex with significantly smaller spreads in futures markets than you can in retail forex markets.

b) Futures is only open 7 hours per day
No - Pit trading is only open 7 hours per day. Electronic futures markets are open almost all week beginning on Sunday afternoon and ending Friday evening. There is no pit trading in Hypersignal's forex market so it's not at all clear why he would sya futures trading is only open when there is pit trading but electronic trading doesn't count. By his definition, his forex market is never open.

c) You pay commissions trading futures contracts
Well - let's see suppose you pay $10 a rounfd turn on a Euro contract for $125,000 worth of Euros. That's a 0.008% loss. There are plenty of YA morons buying physical silver that take 25% transaction fee losses. The 0.008% loss is nothing compared to the larger spreads Hypersignal pays.

d) "Forex is the market I prefer"
I've got $1000 that says Hypersignal has never had a position in a futures contract.

on the stock market what is the difference between forex ,options, equities and futures?

Answer
A good reference for financial terms and definitions is here:

http://www.investopedia.com/terms/forex/f/forex-market.asp

What Does Forex Market Mean?
The market in which participants are able to buy, sell, exchange and speculate on currencies. The forex markets is made up of banks, commercial companies, central banks, investment management firms, hedge funds, and retail forex brokers and investors. The currency market is considered to be the largest financial market in the world, processing trillions of dollars worth of transactions each day.

Investopedia explains Forex Market
The foreign exchange markets isn't dominated by a single market exchange, but involves a global network of computers and brokers from around the world. Central banks use their massive buying and selling capabilities to alter exchange rates through their open market activities and in many cases will do so not with profit in mind, but rather for any number of policy reasons. Forex brokers act as market makers as well, and may post bid and ask prices for a currency pair that differs from the most competitive bid in the market.

What Does Futures Market Mean?
An auction market in which participants buy and sell commodity/future contracts for delivery on a specified future date. Trading is carried on through open yelling and hand signals in a trading pit.

Investopedia explains Futures Market
Volume in the futures market usually increases when the stock market outlook is uncertain.

http://www.investopedia.com/terms/f/futuresmarket.asp

How To Find Good Forex Broker?

I am new in forex trading business. I would like to know if somebody has they experience with good broker? Please advice.

Answer
My definition of good broker is;

Quick response from the Customer Service people.
We can contact them almost instantly each working day.
They are ECN.
They charge small trading fee.
They offer great programs
They are regulated by as many regulation body as they can get.

But you can always find reviews of brokers at forex peace army

Q. I am new in forex trading business. I would like to know if somebody has they experience with good broker? Please advice.

Answer
My definition of good broker is;

Quick response from the Customer Service people.
We can contact them almost instantly each working day.
They are ECN.
They charge small trading fee.
They offer great programs
They are regulated by as many regulation body as they can get.

But you can always find reviews of brokers at forex peace army

What is the best Forex Trading strategy in a dealing simulation (over-the-counter)?

Currently a university student in Australia, majoring in Economics and Finance. This semester, I am doing a finance course where I am expected to go to a dealing room and start trading - dealing simulation. So, there will be two groups where companies will be quoting from banks (companies and banks).

I'm out of ideas as to how I should trade and be the best in the dealing room, in terms of strategy. Any ideas? Five stars for best answer. Thanks!

Answer
Download NinjaTrader for free and use their built-in simulator and start trading now real-time, with professional indicators and charts. At the very least, you'll get a feel for actual trading and terms and definitions and what it all means. Your finance class should give you ideas on how to make money. Otherwise, email me, and I'll send you some ebooks on Forex trading. You'll have to send me your email address for me to send an attachment.

http://www.ampfutures.com/index.php

They won't require you to fund the account for several months, maybe six months. The data feeds for forex and futures are also free.

You can also download ThinkOrSwim for free also, but won't have access to the data for export/import into Excel or other program, where Ninjatrader you do. Ninjatrader is great for the small trader, and you can start with as little as $500.

http://www.babypips.com/school/market_hours.html
http://news.tradingcharts.com/forex/headlines/Forex.html
http://forex-trading.bluecollarnews.com...
http://www.forex-learning.com/forex-trading-technical-analysis/forex-trading-technical-analysis
useful e books:
http://www.rapidforex.com/
http://www.traderssecretcode.com...
http://www.1forextrading.com/
http://forexmarketsuccess.com/forex-ebook/

Forex simulator:
http://fxtrader.investopedia.com/Registration/Register4.aspx

what is the appropriate definition of tourism industry and what is the significance of tourism industry?

Answer
Advantage (depending upon implementation some of these can turn into disadvantages)

employment (1 emp/1000 tourist) (labor intensive, few administrative positions, little upward mobility)

infrastructure development (roads, water, electricity, telecom and cybercom, but not necessarily local priorities)

cultural preservation (economic incentives to preserve food, fashion, festivals and physical history, but these tend to be superficial elements of a culture)

environmental protection (econ incentives to preserve nature, wildlife and urban cleanliness)

foreign exchange (generates resources to import food, pharmaceuticals, technology, consumer goods)

Disadvantages (depending upon implementation some of these can turn into advantages)

cultural destruction, (modernization (world mono-culture), freezes culture as performers, loss: language, religion, rituals, material culture)

primary products (sun, sand, surf, safari, suds, ski, sex) (little value added, neo-colonialism)

environmental destruction (game drives, resorts: golf, ski, beach, desert, world as play ground, SUV)

marginal employment (low skill, low wage, menial services, prostitution, drug trade, gambling, hustlers)

low benefits (no job security, no health care, no organizing, no work safety rules or enviro standards)

outside hiring (skilled middle and senior management recruited out of the area and transferred in)

concentration employment (walled resort enclaves)

seasonal employment

outside decision making (decisions made outside of the area, corporate dollars corrupt government)

unrealistic expectations (divert young people from school and brighter futures.)

anti-democratic collusion (industry support of repressive governments)

land controlled by the elite (people relocated, agriculture eliminated, prohibited from N.P.)

negative lifestyle's (STD's, substance abuse, begging, hustling)

diverted and concentrated development (airport, roads, water, electricity to tourist destinations, development not accessible to locals),

little forex stays in country (airplanes, vehicles, booze, hot air balloons, generally have foreign owners),

package programs

cruises (eat and sleep on board)

unstable market (fickle, affected by local and world events, generally highly elastic)

Solutions (visitor)

act to support cultural diversity

engage in activities that add value to the community

donât do activities that deteriorate the environment

donât engage in illegal activities

act to disperse the benefits

patronize locally (community) owned enterprises.

Solutions (host)

support the traditional cultural legacy

training and education in local culture, history, natural science, etc.

select development and activities that draw from local traditions and add value to the community

donât promote activities that deteriorate the environment

donât engage in illegal activities

adopt a program to disperse the benefits

patronize locally produced products and locally (community) owned enterprises.

make business and foreign exchange transactions transparent and efficient.

How many pips does the average retail forex trader make?

I'm trying to trade forex on my own, with 3 strategies based primarily on technical analysis, supplemented by fundamental analysis. I've developed these strategies through homework, lots of reading and just a bunch of research. I bought a system in the past and got burned. Now I'm doing it myself. Does anyone know the honest average range of pips professional retail traders make every month? My impression was that they make an average 250-500 pips a month. Not to say they do that every month, it's just the result when averaged out. Right now, after 2 months of trading, I've made a little over 200 pips and I'm hoping to maintain that and improve to the 250-500 pip average a month range. Is that realistic? Ideal? What should be my target monthly average to be a truly successful forex trader.

Answer
It is not wise to have a monthly pip target. If you fall behind your average it is easy to freak out during the last week of the month and make irrational decisions based on greed or fear. The easy way to target your trading is to set a daily pip target or what I like to call a Minimum Acceptable Target (MAP).

15 pips seems to be a conservative daily goal that if hit, will give you over 300 pips per month.

The definition of a "successful Forex trader" is in the eyes of the beholder. What is successful for one might not meet the expectations of another. Personally, I like having a target of increasing my investment portfolio by at least 8% per month.

Good luck with your strategies.

Paul

Day trading or longer-term trading..
For stocks, commodity futures, FOREX, etc.
For instance, what are the benefits and disadvantages or trading stocks as opposed to oil futures?
Thanks a lot, I'm just curious as to why some people choose to only trade FOREX or only trade commodities when the underlying strategies and principles seem similar enough

Answer
There are many advantages to forex trading as compared to the stock market. However, beware that some of these advantages can be a double edged sword if you are not careful or donât have the knowledge to take proper advantage of them while at the same time guarding against losses.

1. Market Open 24 hours a day.
You can conduct business twenty-four hours a day with forex. Stock market traders on the other hand have a limited time when they can trade. This âperpetual open marketâ is very handy for people who are just starting out trading forex. Stocks force you to trade only when the stock markets are open, but with forex you can schedule your trading whenever it is convenient for you.

2. Margin = Leverage.
The ability to trade on margin gives forex traders significant leverage in their trading and offers the potential to make extraordinary profits with relatively small investments. For example, with a broker that allows margin of 100:1 you can purchase $100,000 in currency with only a $1,000 deposit. Of course, leverage goes both ways and can lead to large losses if you are not careful.

3. Liquidity and Trade Execution Time.
You are trading in cash when trading forex. Stock markets on the other hand require an active seller of a particular stock. Thereâs no investment more liquid than cash, so forex trades are executed near instantaneously. Thereâs no sitting around waiting for your trade to execute.

4. Market Not Easily Influenced by Individuals.
The foreign exchange market is so incredibly huge that no one individual, fund, bank, or government entity can influence it for long. This is the opposite of the stock market where one negative appraisal of a companyâs stock could send it into a tailspin.

5. Only a Few Major Currencies to Follow vs Thousands of Stocks.
There are only seven major currencies to follow when trading forex. Stock markets on the other hand have thousands of stocks available to trade not to mention new IPOs to evaluate on a regular basis. Following them all is all but impossible. With forex you can devote a lot more time to each of the seven major currencies. Some traders specialize in just 3 or 4 currencies and narrow their focus even further.

6. No Bear Markets.
you are trading to predict the direction of currencies either up or down with forex. Stocks on the other hand can experience long bear markets where seemingly everything is going down. Trading forex currency pairs is by definition an activity where you are predicting which currency will be going up and which one will be going down with every single trade. All you need to do to succeed is predict correctly, not always as easy as it sounds!

How do I pay income tax on ForEx earnings?

I am doing normal daily trading of EUR/USD, trades lasting a few hours on average. I am not sure if this is considered futures or securities and I therefore don't know how to pay taxes on it.

Answer
NOTE: "Forex Taxes" are applies to U.S. traders only. Foreign investors that are not residents or citizens of the United States of America do not have to pay any taxes on foreign exchange profits!


Forex Trading Taxation - Definition and Overview:
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,...

More and more investors from all over the world are accessing the largest financial markets online through their personal computers. As demand surges for foreign exchange trading, more and more U.S. Traders have to deal with taxation issues at the end of the year.

Forex: Taxed as Futures or Cash?

Currency traders involved in the forex spot (cash) market, can choose to be taxed under the same tax rules as regular commodities [IRC (Internal Revenue Code) Section 1256 contracts] or under the special rules of IRC Section 988 (Treatment of Certain Foreign Currency Transactions). IRC 988 applies to cash forex unless the trader elects to opt out.

The Advantage of Section 1256 for Currency Traders Under Section 1256, forex traders can have a significant advantage over stock traders. By reporting capital gains on IRS Form 6781 (Gains and Losses from Section 1256 Contracts and Straddles), forex traders are allowed to split their capital gains on Schedule D using a 60% / 40% split. This means that 60% of the capital gains are taxed at the lower, long-term capital gains rate (currently 15%) and the remaining 40% at the ordinary or short-term capital gains rate, which depends on the tax bracket the trader falls under (as high as 35%). This results in an average rate of 23%, which is 12% less than the regular (short-term) rate.

If cash forex is subject to the Section 988 rules, how can a trader elect the more beneficial Section 1256 split? Please read on to find out more.

To Opt Out or Not to Opt Out of Section 988 !!

Companies that profit from the fluctuation in foreign exchange rates as part of their normal course of business, fall under Section 988. This means their gains and losses from foreign exchange (such as buying and selling of foreign goods) are treated as interest income or expense and get taxed accordingly. Consequently, they do not receive the beneficial 60/40 split.

Since forex traders are also exposed to daily exchange rate fluctuations, their trading activity falls under the provisions of Section 988 too - but don't worry. The IRS wants to be nice to you (so far). Because these daily fluctuations can be considered part of a currency trader's assets in the normal course of his business, the IRS gives the trader the option of rejecting (opting out) of Section 988 and electing that the gains be taxed under the favorable 60/40 split of Section 1256.

What do you have to do to opt out of Section 988? Even though you don't have to file anything with the IRS to opt out, you are required to do so "internally" before starting to trade; i.e., you must keep records in your own books about the fact that you are opting out of Section 988.

Many currency traders bend the rules by waiting after the year is over to see if they have any gains from their trading activities. If they do, they claim that they elected out of IRC 988 to enjoy the beneficial Section 1256 treatment. On the other hand, if the sum of the trades from cash forex is not positive, they stick with the traditional Section 988. Since (under the current tax law) it becomes very difficult to disprove whether the trader made the election at the beginning or at the end of the year, IRS has not yet begun to crack down on this activity.

What does a Forex Trader do When Tax Time Comes?

Forex traders should receive 1099 forms from their US-based broker at the end of the year like stock and futures traders do. No matter in what country your forex broker is based or what tax-related reports they provide, you could pull up reports online from your accounts and seek the help of a tax professional. No matter what you decide to do, don't fall into the temptation of lumping your trades with your section 1256 activity (if any). Forex transactions need to be separated into Section 988 reporting.

Given the fact that the forex market is one of the fastest-growing financial markets around, it might eventually come under closer IRS regulation. In the meantime, traders continue to enjoy tax advantages by trading foreign currencies.



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I'm trying to trade forex on my own, with 3 strategies based primarily on technical analysis, supplemented by fundamental analysis. I've developed these strategies through homework, lots of reading and just a bunch of research. I bought a system in the past and got burned. Now I'm doing it myself. Does anyone know the honest average range of pips professional retail traders make every month? My impression was that they make an average 250-500 pips a month. Not to say they do that every month, it's just the result when averaged out. Right now, after 2 months of trading, I've made a little over 200 pips and I'm hoping to maintain that and improve to the 250-500 pip average a month range. Is that realistic? Ideal? What should be my target monthly average to be a truly successful forex trader.

Answer
It is not wise to have a monthly pip target. If you fall behind your average it is easy to freak out during the last week of the month and make irrational decisions based on greed or fear. The easy way to target your trading is to set a daily pip target or what I like to call a Minimum Acceptable Target (MAP).

15 pips seems to be a conservative daily goal that if hit, will give you over 300 pips per month.

The definition of a "successful Forex trader" is in the eyes of the beholder. What is successful for one might not meet the expectations of another. Personally, I like having a target of increasing my investment portfolio by at least 8% per month.

Good luck with your strategies.

Paul

What are the pros/cons of trading one given class of financial assets as opposed to another?

Day trading or longer-term trading..
For stocks, commodity futures, FOREX, etc.
For instance, what are the benefits and disadvantages or trading stocks as opposed to oil futures?
Thanks a lot, I'm just curious as to why some people choose to only trade FOREX or only trade commodities when the underlying strategies and principles seem similar enough

Answer
There are many advantages to forex trading as compared to the stock market. However, beware that some of these advantages can be a double edged sword if you are not careful or donât have the knowledge to take proper advantage of them while at the same time guarding against losses.

1. Market Open 24 hours a day.
You can conduct business twenty-four hours a day with forex. Stock market traders on the other hand have a limited time when they can trade. This âperpetual open marketâ is very handy for people who are just starting out trading forex. Stocks force you to trade only when the stock markets are open, but with forex you can schedule your trading whenever it is convenient for you.

2. Margin = Leverage.
The ability to trade on margin gives forex traders significant leverage in their trading and offers the potential to make extraordinary profits with relatively small investments. For example, with a broker that allows margin of 100:1 you can purchase $100,000 in currency with only a $1,000 deposit. Of course, leverage goes both ways and can lead to large losses if you are not careful.

3. Liquidity and Trade Execution Time.
You are trading in cash when trading forex. Stock markets on the other hand require an active seller of a particular stock. Thereâs no investment more liquid than cash, so forex trades are executed near instantaneously. Thereâs no sitting around waiting for your trade to execute.

4. Market Not Easily Influenced by Individuals.
The foreign exchange market is so incredibly huge that no one individual, fund, bank, or government entity can influence it for long. This is the opposite of the stock market where one negative appraisal of a companyâs stock could send it into a tailspin.

5. Only a Few Major Currencies to Follow vs Thousands of Stocks.
There are only seven major currencies to follow when trading forex. Stock markets on the other hand have thousands of stocks available to trade not to mention new IPOs to evaluate on a regular basis. Following them all is all but impossible. With forex you can devote a lot more time to each of the seven major currencies. Some traders specialize in just 3 or 4 currencies and narrow their focus even further.

6. No Bear Markets.
you are trading to predict the direction of currencies either up or down with forex. Stocks on the other hand can experience long bear markets where seemingly everything is going down. Trading forex currency pairs is by definition an activity where you are predicting which currency will be going up and which one will be going down with every single trade. All you need to do to succeed is predict correctly, not always as easy as it sounds!