How Does Forex Trading Work?

By Lynn A. Granata

Currency Pair: We wouldn't have a Forex market if we weren't able to compare the value of one currency against the value of another currency. It is this comparison that drives prices. Forex contracts are always quoted in pairs. The Euro vs. the U.S. dollar (EUR/USD) is the most heavily traded currency pair.  

Here I have decided to upload a video to my blog, that lets you see firsthand of what forex trading really is.

This isn't intended to cover the rights and wrongs about forex trading, instead it only covers primarily what it is.  Thus it's not intended to promote the topic of forex trading in any negative point of view, nor is it designed to criticize forex trading, its sole purpose is to explain what forex trading is and how it works.  There will be more topics about forex trading by me, in the near future which will discuss the pros and cons of forex trading, and how financial crimes and scams are abused through the use of forex trading products.

So, Happy Viewing....

Reference

youtube.com/forextrading

    

Forex Trading; What Exactly Is It?

By Lynn A. Granata

Have you ever heard the term Forex Trading before? To be honest with you, neither have I.  First lets break it down. We will take a look at the word forex itself.  It can be broken down into syllables which gives us a good idea. So here is an example of what we mean when we break down this small two syllable word.

for/ex

The first three letters of the first syllable may or may not give it away as to what word it stands for.  Foreign is the word that syllable 1 stands for.  Ex, the last syllable can be a lot of words in the english language. Okay, now when we use the word foreign, most of us in the United States of America expect that to mean anywhere overseas. That doesn't necessarily include Canada or South America, but it still might to some people.  The last syllable is short for the word exchange.  

Put the two shortened words together and you have forex.  Foreign Exchange Trading, answer to the question in the title caption is trading with continents abroard. It is a relatively common term and it's been used a lot these days. Forex Trading has become popular through the use of outsourcing in recent years.  Back in the post World War 2 era, there were hundreds of thousands manufacturing jobs in America.  

When the economy got weak back around 30 years ago, the factories moved to countries such as China, Taiwan, Africa, India, etc. The pay in these countries are far lower than what you could pay employees for the same hard labor in the US.

So the owners of these factories may still have their corporate headquarters here in the states, but their global movement is much greater than it was before. All because they can open up foreign bank accounts within these countries, and stash their profits in banks in any one or more foreign banks.  European banks have a lot of trading going on with American businesses. It's really difficult to say for certain whether or not if forex trading is illegal. The only time this could be unethical is if the corporate executives profit directly off of what the hard labourers make.  As opposed to what these products yield in the global market economy.

Forex has been abused in recent decades and it is difficult to monitor completely. Oil, for instance has been the target of forex trading scams overseas.  The large corporations wanted the freedom to have their assets tied up in foreign banks, so that they didn't have to report it to our government. Here is where forex trading has been abused and in fact really does cause harm to the global economy.

Financial Crimes:  Are They Victimless?

By Lynn A. Granata

There is an umbrella term which describes financial crimes. It mostly directs to one word, if not several, fraud, Forex trading crimes, embezzlement, etc.  Remembering Bernie Madorf about ten years or so ago, what he has done was create a Ponzi-scheme.  He was advertising a business like back in the old days, except rather than a chain letter, it was being advertised in the newspapers and the classified section.  It was a work at home scheme, whereby he was selling computer software pertaining to actually nothing.  Like a whisper and then pass it down to the next individual and then the next, until it leads to nowhere. 

I am not that familiar with what it exactly was he was selling and what kind of software, but, I'll do my best to verify as much credible facts as possible to find out.

There are a lot of Forex trading software information being sent everyday and at every millisecond to email accounts everyday. They end up in the spam folder.  You may or may not have gotten one but they come in all shapes and sizes and from impostors from every corner of the globe. This information is useless, because all it does is simply lead you to a page with a big credit card logo, that's right, to get you to buy something worth nothing. Bernie Madorf was doing just that.  His software would sell for hundreds of dollars, after you bought his software then you would receive instructions written and copied to a CD.  Giving you instructions to do the exact same thing and send hyperlinks to a bunch of people (victims) on a list.  Where was the list? Well it was on the CD that you bought from his little Forex trading scheme. They were HTML codes that you'd presumably get off of the software to cut and paste into a browser, so that they'd create a widget for a purchaser to send emails to a bunch of servers.

Madorf continued to do this until he was reported for not paying his taxes. He never reported anything to the government about this enterprise he was running.

He lost all the money he received, because, a Ponzi-scheme leads to a dead end. He advertised it, telling people how they could become millionaires overnight. Anybody who fell for it was out of hundreds of dollars with no way to recoup their money.

Those that did buy it found out soon enough that there's no way you can become a millionaire overnight. So they lost, and Madorf lost, because he literally went broke from his lack of earnings. He couldn't make anymore CD's he was not getting enough "chain" sales.

Today Madorf is sitting in a federal penitentiary reflecting on his life until the end of time.