Answers
I am an active investor, have done well with common stocks, Nasdaq and NYSE, but am new to foreign currency exchange. I do my own homework, and have had mixed experience with several forex brokers over the past months. I have used FXCM and Saxobank in London, both are rather large firms. While seeking a mentor, I recently received a promotion in the mail from an Atwood and James, which appears to be a small operation, but the fellow seemed to know a bit about forex, and spent the time to share his experience. So far, with the larger firms I am ahead of the game, but only slightly. Any suggestions or help or experience with smaller brokers? Anyone have experience with these Atwood and James people?
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how we calculate foreign currencies exchange gain and loss, if you buy & sell stocks in international markets with currencies different than your operational currency, when we realize exchange rates gain and loss and which accounts would be affected by these gains or/and loss, do brokers and banks account got affected as well ?
Talk to your broker.
If you trade electronicaly using your brokers platform, most likely the prices will be quoted in US dollars.
I always assumed that you needed to use an online dealer/broker if you wanted to make money through Forex (foreign exchange market).
But then I came across this webpage:
http://www.ehow.com/how_4928810_money-fo reign-exchange.html
That basically says to exchange currency at a bank yourself, in person. I just want to know why this wouldn't work. Obviously you wouldn't have the benefit of leverage, but this would also minimize the risk.
For one thing, there's no dealer to automatically cancel your existing trade in case you start to lose more money than you can fund, so you could wait for the currency to rise in value again before trading.
Also, you wouldn't have to lose out on the spread that the dealer makes a profit from.
But what about the fees that banks charge for currency exchange? And is a bank going to be the most economically-efficient place that you could go in order to exchange currency?
Could you actually start to make significant profits through forex by exchanging money yourself through a bank or somewhere else where you could exchange one country's currency for another's ... instead of going through an online broker?
It can be done, but.... You couldn't "trade" with any degree of frequency because the spread is beyond awful, maybe as wide as 200 pips fir EUR-USD.
Some banks outside of US allow you to keep money in a currency of your choice and you can switch it every so often. This is, for all practical purposes, longer term trading.
As far as leverage goes, you don't have to use it with your forex broker and still do good. Read this.
Colombia's Peso Drops Before Bank Decision; Chile Peso Gains
By Andrea Jaramillo
Oct. 23 (Bloomberg) -- Colombia’s peso fell, capping its biggest weekly decline since June, on speculation the central bank will act today to ease the currency’s rally.
The peso weakened 0.2 percent to 1,917.95 per U.S. dollar at 5:18 p.m. New York time, from 1,914.82 yesterday. The currency slumped 3.9 percent this week, hurt by concern about capital controls after Brazil imposed a tax on stocks and bonds to ease the real’s rally. The peso has jumped 20 percent in the past six months, the second-best performing currency in Latin America after the real.
Finance Minister Oscar Ivan Zuluaga , who is also president of the central bank’s board, said last week policy makers may take measures to stem the peso’s gains in their monetary policy meeting today which started at 9:30 a.m. New York time.
“Investors are buying dollars in the market on bets the central bank will look to weaken the peso and they can therefore afterwards sell those dollars at a better rate,” said Jorge Cortes , an analyst at Corporacion Financiera Colombiana SA. “Many are expecting either an interest-rate cut or capital controls.”
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...News
Fidelity Pumps Up Foreign TradingWall Street Journal - Oct 22, 2009
"We're seeing a significant shift toward this type of opportunistic investing—taking advantage of a falling dollar and a foreign-exchange play and a greater Fidelity Launches New Online Platform For Foreign Stocks and Currency ExchangesOnline FX Trading Gets Easier With FidelityFidelity Opens World With Trading Platform -all 25 news articles »Bloomberg - Oct 24, 2009
Colombia's Peso Drops Before Bank Decision; Chile Peso GainsCortes forecasts the central bank will opt to buy dollars directly in the foreign-exchange market. Banco de la Republica in June 2008 announced the purchase Colombia Peso Drops on Possible Measures; Argentine Bonds Gainall 8 news articles »DAWN.com - Oct 25, 2009
CTV British Columbia'The US dollar is gaining against the local currency mainly because the demand is high,' said Asif Ali, a currency exchange dealer. Carney Currency Warning May Have Fleeting Influenceall 60 news articles »
Wall Street Journal - Oct 19, 2009
"A lot will be determined by how credible the fiscal constraints this and future governments put into place," says David Gilmore of Foreign Exchange and more »Reuters - Oct 22, 2009
Instead, the investor places a foreign trade and then Fidelity automatically exchanges the exact amount of foreign currency needed to execute the trade when