Review of Forex Killer: It’s all about Systems!

Posted on May 6, 2008
Filed Under Forex | Leave a Comment

Our Review of Forex Killer of last week was centered around the basic principles of this industry. This week see the extension of this discussion to more advanced concepts such as systems as well as the completion of our current review of forex killer.

Well, they come in two flavors, FLEXIBLE or FIXED. In the Flexible Forex Rate System, the central bank is responsible for adjusting the exchange rate according to supply and demand.

When the Central Bank has to compensate for currency market fluctuations changes by buying or selling currencies, we have a Fixed Forex Market System. In this case, the Bank acts as a buffer between currencies.

In order words for each price increase of one currency, the Central Bank must sell in order to compensate for the increase. Likewise, when a currency market price decreases, then the Bank must now buy more of that currency so that the market valuation for that currency is re-established.

It is very much like a pendulum swinging from one side to another. Ideally, there should be no movement with the market value held in the middle. The Central Bank’s responsibility is then to ensure that the swinging movement is reduced and brought back to the middle by either buying or selling some of its own currency stock.

It’s all about pennies!

Or lots of them.. In fact way more than lots of them since the Forex market in the biggest market in the financial world and that’s just not here but throughout the world. If you ever wondered why exchange and forex traders seemed to be rolling in it, it’s because they really are!

Indeed we are taking about insane amounts of money here. So much so that you would need 12 zeros to the right of the number 2 to get a representation of what that market really is, and that would just be for a single day’s trade!

So if I align the numbers, 2,000.000.000.000 USD are traded worldwide every single day! Or two thousand million USD or if you’re a Forex Killer Trader, two trillion Dollars!

As an “Over The Counter” operation, the Forex Market relies on a computer network and as opposed to the more traditional brick and mortar institution. It is open to traders 24 hours a day and is uniquely suited for both the cooperate trader and the at home trader.

Forex Traders or FX Traders as they are also known are in the business of buying and selling currencies from each other. The results of these transactions are then fed into these networked computers in order to be displayed on official quote screens.

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