“Trading-Heaven” was created by International Association of Forex Traders. Despite the fact that the organization is relatively young it has already gained significant popularity.
    “One of the ways to become rich is to be generous to others” as wise men say. This is the underlying principle of the Association’s work. Today IAFT boasts providing the most comfortable work conditions in foreign exchange.

    The biggest advantage of IAFT is providing the traders-participants with 60% of the partnership reward for their accounts and full protection of their capital. Also, the Association’s Legal department provides assistance in settling any possible disputes with brokers absolutely free of charge. If, for example, a broker does not fulfill his responsibilities, breaches the terms of the agreement, ignores the letters or does not answer the phone – a trader can always count on the help of IAFT’s professional legal counsels.

    The Association’s successful work is assisted by its “union” with “EMEXB Ltd.” consulting company that takes an active part in realizing “Traders Union” ideas. The company has also become the founder of the insurance fund for IAFT participants. It should be noted that none of the similar organizations can boast the service of insuring the deposit.

IAFT provides various additional services  – numerous broker ratings, reference materials, etc. Beginners will not feel left out – even the “rookies” of trading can receive any necessary information by visiting the site. Having the will and following good advice will enable you to confidently march up the Forex career ladder!

Forex trading is also not limited by time in that currency trading is able to happen twenty four hours a day and most days of the week as long as the forex trader is connected to a bank or corporation network.  Even as many investors look into trading forex online they are always aware of the unique opportunity that currency trading offers them because of the various features that it offers in terms of getting a good return on their investment.

The features that make forex trading stand out when it comes to making money online include the trading volume that it presents to the people interested in forex. This allows them to be able to trade in a variety of currencies that puts them in a position where they can earn large amounts of money depending on their skills in forex trading. 

The liquidity of the forex trading market is also a feature that makes trading easier as one is able to transfer money from one trader to another with a few hindrances as possible. The liquidity is important because while currency trading the value of the currencies tends to fluctuate and so it is important to be able to transfer money fast so that one makes as much profit as possible.

The number of forex traders in the market is increasing on a daily basis thus making this type of income generating activity very lucrative. The forex traders are from different countries which means that when one currency is not doing well, the currency trading can be switched to the ones that are strong as the others recover.

With all these benefits that  forex trading offers an entrepreneur or investor it is only normal that many are turning to currency trading as a way to supplement their income or some who trade in forex as their primary source of income. From observation one might be tempted to think that it is hard to get into the business of trading in forex, yet this is not the case as only a few requirements are needed before one plunges into the world of currency trading.

First, you will need to secure an online broker who will be able to facilitate the opening of an account where the forex trading will be taking place. If possible select a broker that is affiliated to a reputable and large banking establishment. Read the reviews on the broker as well as the rules that they employ as they work with you so that you do not lose money in the long run.

Second, the decision on how much money is to be deposited in the account that will be used to trade in forex on your behalf. Most beginners prefer to invest money that they are not afraid to lose the first time and then they will increase the amount gradually as they gain more confidence in forex trading.

Third, currency trading has some rules that need to be adhered to so that you are successful in your endeavor to make money. It is important that you analyze the general trend that the currencies that you want to trade in have taken and the projections that are being put out concerning them.

Lastly, when you have understood the fundamentals of the forex market then you are in a good position to start trading. You can do this by using the demo accounts that are offered by most brokers to practice your skills until you are confident to go it alone.

Read a comparison of currency binary option trading versus forex trading and under what conditions it is best to use each strategy.

The relatively recent availability of online binary option trading has made taking binary option positions in a major currency pair just about as easy as trading the spot forex market. 

Although this adds another possible risk taking tool to the forex trader’s box of tricks, it remains important to distinguish when trading binary options is preferable to trading spot forex, and vice versa.

Risk and Reward Characteristics of Binary Options Versus Spot Forex Positions

To start with, the primary feature of purchased binary options is their absolutely limited risk that can easily be quantified as soon as the binary is paid for. Basically, the risk in holding a binary option is just the upfront cost or premium that you paid for the binary option.

Furthermore, the reward from buying the binary option is also limited to the pre-determined payout of the binary.  This limited risk and reward characteristic of binary options makes assessing the risk to reward ratio of a binary option trade especially easy.

On the other hand, a standard spot forex position has virtually unlimited risk and reward potential, unless offsetting stop loss and take profit orders have been left in the market with a reliable forex broker.

Nevertheless, even if protective orders have been placed, the risk exists of slippage on stop loss orders in fast markets, as well as the risk of a broker’s failure to execute a take profit order despite the order level having been traded at. 

Conditions When Holding a Binary Option Might be Preferable to a Spot Forex Position

A significant risk with holding a spot forex position involves trader error. For example, a busy or inattentive forex trader might think they have entered their protective orders, but they actually did not. They might also have forgotten to enter the orders, have had a system failure when entering the orders or lost their trading discipline and moved their orders when they should not have.

Each of these risks can be overcome and effectively eliminated by using a purchased binary option to take a market view on a currency pair, rather than a spot forex position.

Another situation when holding a binary option may be preferable is over the release of a major economic number, like the U.S. Non-Farm Payrolls, or during an important news announcement.  Since considerable market volatility can occur immediately after such events as market makers discount the new information into an affected currency pair’s exchange rate, the sharp swings can prematurely trigger a stop loss order, perhaps even incurring unanticipated slippages losses, when the spot position would otherwise have been profitable shortly afterwards. Holding a binary option would allow a trader to weather this storm safely and still come out ahead, if their view turned out to be correct.

Conditions When Holding a Spot Forex Position Might be Preferable to a Binary Option

Although binary options offer considerable security advantages to a forex trader, as illustrated in the section above, this security comes at a price, which is the premium a trader pays to hold the option.

On the other hand, trading spot forex only costs a trader the bid offer spread, which is only a few pips these days. This cost is therefore is pretty much negligible for all but the shortest time frame trading strategies, like scalping perhaps.

As a result, well disciplined forex traders operating in a relatively peaceful and predictable market — and who have taken the time to double check that their protective orders are properly placed with a reputable broker— might feel secure enough to wish to minimize their costs by trading spot forex, rather than purchasing a safer binary option to hold instead.

After all, if the market moves in their spot position’s favor, as they expect, they will not have paid the premium to hold the binary and this will enhance their return by the cost of the binary. 

In addition, since the binary only offers a limited payout, the trader using a spot forex position to take a view can follow a trend by trailing their stop loss orders to increasingly more attractive levels behind their position. This strategy would keep their losses limited, while still allowing their profits to accumulate to higher levels than a binary option’s limited payout would have yielded.

With the increasing effects and demands of the global economy on the forex market, combined with ready access to online and automated trading capabilities, the forex trading experience is rapidly changing. 

Retail Traders Flock to Online Forex Trading  

Perhaps one of the most dramatic recent changes in the forex market has been the influx of an increasing large group of retail forex traders trading on margin. This has largely been due to advances in communication technology spurred by the advent of the Internet and the widespread availability of affordable personal computers. 

Furthermore, strong competition among online forex brokers has led to increasingly competitive forex trading spreads, more sophisticated trading platforms and attractive account management terms for retail forex traders. 

Often, these personal traders are dealing for their own accounts in what used to be very, very small foreign exchange dealing sizes. They can now do so easily and almost instantly without paying per transaction commissions and on competitive dealing spreads using their personal computer and Internet connection from the comfort of their own home 

In the past, forex deals would tend to be done over the phone with a bank’s dealing desk and the execution received would usually be far from instantaneous. 

Also, trades in such tiny face amounts would also receive very poor and only one sided pricing from large banks who usually could not be bothered to transact such business unless they made some money off the trade. 

 Increasing Trend Toward Automation

 For some time, large financial institutions have been experimenting with sophisticated automated forex algorithmic trading programs that will mechanically buy and sell currencies according to pre-defined trading parameters.

 The cost of these systems was once well outside all but the wealthiest of individual traders’ budgets. Nevertheless, retail forex traders these days also have considerably more automated currency trading options than they have enjoyed in the past.

 Not only can they use commercial trade signal generating systems and relatively inexpensive forex trading robots, but they can also program their own trading algorithms to implement and operate their personal trade plans with their own set of rules.

 Growing Forex Product Diversity 

Another way in which the globalization of communication has changed the forex market is that forex traders can now choose among a variety of different currency trading products that present a forex trader with what seems to be an ever increasing array of currency trading vehicles. 

 For example, these products might include forex derivatives such as currency futures, options and swaps that can be executed electronically in a variety of different markets physically located around the world.

 As more alternatives for trading in the forex market become available to a growing trading community, traders can take advantage of increased flexibility in forex trading choices and forex brokerage service providers.

 While this greater product diversity can assist a forex trader in devising new strategies and fine tuning their risk profile, a lack of familiarity with how to go about pricing such products can lead to customers being taken advantage of by unscrupulous dealers or brokers.

 Accordingly, be sure to research each new product carefully and also read a variety of online forex broker reviews to make sure you are dealing with a reputable counterparty.

The greatest competition on the globe exists between  two nations Japan and China  as their growth and advancement depends on global exports.

Both great nations are dynamic , but there is a vast difference as how their economy works. Let us understand how these both economies compete and work their way to success.

Japanese is an Organized Economy  previously understood as developed economy and dominant exporter to USA and Europe in last century until late 70′s when  China step up their focus on export and growth. Although Chinese growth is phenomenal and unprecedented, but still classified as Unorganized Economy 

• Currency:
  Japanese currency is convertible, which is based on market forces of demand and supply  and experience economic cycle, economy is regulated by central bank through its monetary policy.
• Chinese currency is non-convertible, which is controlled by Chinese central bank and the value of the currency does not depend upon market forces, but by Chinese government, thus subsidizing the exports to accelerate growth in export and economy.

Usually, when a nation is developing, government controls the value of currency to boost export and economic growth, this is known as subsidy in the world of globalization and is justified when a nation is in stage of infancy to protect from global competition. Weak currency boosts exports as stronger currency loses competitive edge.

Since Chinese Yuan is controlled by government and Yen is determined by free market, Yuan has a edge over export and accelerated growth than Japanese Yen.  When Yuan reached its strength in late nineties where market value of Yuan was  stronger than  government control  rate,   Japan started losing its edge in exports leading to depression/recession, this lead to depreciation of Yen allowing Yen to sustain economy without growth for a decade.

 Until  Recently Yuan was  pegged to USD, once Yuan was made partial pegged  Yen also started gaining strength.

Interest rate

Interest rate has a huge impact on convertible currency rate.
Higher interest leads to stronger currency value as global capital/investment/saving flows in to the economy.
Japanese  interest rate is based on economic cycle and interest  rate depends on current national economic scenario based on economic data. While experiencing extended period of depression, Japanese central bank kept its interest rate almost at Zero level, thus ensuring weak Yen to fight competition against Yuan until Yuan appreciates or becomes convertible.

Economic Cycle

Yen is a convertible  and organized economy and right at the market place
Yuan is a non-convertible and hence unorganized economy and far from market place although its exports are just second to Japanese.

Why is Yuan so behind in real world, although economy has huge export,  extra ordinary growth and Yuan being stronger than ever with upward pressure?

Unorganized economies have two inherit disadvantages  in globalization – Protectionism and Subsidization.

The strength of Yuan is based on protectionism and subsidy. Eventually, when unorganized economies have to face the real world, its impact on economy would be unpredictable for the following reasons:

Unorganized economies which have a robust growth like China and India, but they still prefer to maintain  policy of Protectionism and Subsidization to maintain their economic growth, although these economies can with stand convertibility.

• Unorganized economies consider Economic growth  Gross Domestic product and Inflation  separately.
  By differentiating the growth separately from inflation  such economies lose their sight from net growth
  Leading to Negative Economic Growth, if  Growth – Inflation  is Zero or negative.
• This is because the government believes that growth and inflation are two different factors and  inflation is always associated with growth and to be dealt differently.
•  The major issue here is higher inflation may lead to purchasing power parity with organized economies and that would  increase cost of living leading to higher labour cost and translating into higher subsidy through government control exchange rates.

Conclusion: 

The Unorganized economy can only achieve desire net growth by controlling  inflation through currency convertibility and expose economy to global economic cycle , delay in convertibility by economies like China and India will hurt them in long term.
Convertible currency gives a identity to a nation.

Check out our Forex Metrics Currency Index 

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