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Category: Brokerage

The Foreign Exchange market is the largest and most liquid financial market in the world. A fully decentralized market that moves across 3 different time zones, 24 hours a day, five days a week...

 

The Foreign Exchange market is the largest and most liquid financial market in the world. A fully decentralized market that moves across 3 different time zones, 24 hours a day, five days a week. Whether you are a small ECN trader in Asia opening a speculative position on the Eurodollar or a large institutional investor in London executing $1 billion USD in OTC swaps, you are participating in this decentralized architecture. The activity in each different time zone plays a distinct role in the process of currency trading:

  • Asia session ⇒ sets early liquidity in the Forex Market
  • London session ⇒ creates early trends (volume surge)
  • New York session ⇒ resolves (completes) trends set earlier

The Fundamental Architecture of the Forex Market

 

The operation of the Forex market is based on an over-the-counter (OTC) model, meaning there is no central exchange like there is for stocks (e.g., NASDAQ) or futures products (e.g., CME). Instead, daily activity is conducted via electronic platforms that match liquidity.

  • The Bank for International Settlements’ (BIS) Triennial Survey reported a record average daily FX turnover in April 2025, exceeding USD 9.6 trillion (FX swaps, spot trades, forwards, and options all contributing to that massive volume).

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Category: Trading Rules

Internal control is one of the major determinants of the long-term trading success. The following article is based on the book “Trade Your Way to Financial Freedom” by Van Tharp...

 

Internal control is one of the key determinants of long-term trading success. The following article is based on the book Trade Your Way to Financial Freedom by Van Tharp.

 

The Importance of Internal Control

 

According to Van Tharp, internal control involves three key components:

  • Psychology (60% weight)

  • Position sizing (30% weight)

  • System development (10% weight)

In many ways, trading success is a result of internal control. However, most traders fail to recognize its significance.

  • Internal control is essential for effective portfolio risk management.

  • Traders who commit to developing internal control are the ones who ultimately succeed.

  • Most successful speculators have low win rates (35–50%), yet they remain profitable because their gains significantly outweigh their losses—this requires strong internal control.

  • Successful fundamental investors are often contrarians who wait patiently for the right opportunity before entering a position, which also demands internal control.

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Category: Trading Rules

Martin Zweig (1942-2013) was a famous American stock market analyst, adviser, and investor...

 

Martin Zweig (1942–2013) was a renowned American stock market analyst, adviser, and investor. His investment approach combined macroeconomics, fundamental analysis, and market timing. In addition to his popular newsletter, The Zweig Forecast, he published two books:

  • “Winning on Wall Street” (1986)
  • “Winning With New IRAs” (1987)

The following advice is taken from his first book.

 

General Advice from Martin Zweig

 

  • The major direction of the market is dominated by monetary considerations, primarily FED policy, and the movement of interest rates
  • Once established, the trend typically lasts from one to three years.
  • Combining to produce a monetary "climate" is loan demand in the economy, liquidity in the banking system, inflation or deflation, and, of course, policy decisions by the Federal Reserve
  • To succeed in the market you must have discipline, flexibility, add patience. You have to wait for the tape to give its message before you buy or sell.

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Category: Trade Resources

 

A currency exchange rate reflects interest rate policies as well as macroeconomic factors such as economic growth, inflation, and unemployment.

 

Basic Fundamental Conditions in the Foreign Exchange Market

 

Primarily, an exchange rate is influenced by a combination of the following fundamental conditions:

(i) growth, inflation, and unemployment

(ii) monetary policies, and especially the interest rate policy of the central bank

(iii) fiscal policies & government spending

(iv) political stability (political risk)

(v) legislation regarding capital taxation & the openness of the domestic economy

 

New macroeconomic developments can create trading opportunities in the Forex market

The Forex market is highly efficient, with news impacts quickly reflected in exchange rates. However, major shifts in the broader macroeconomic environment can present significant opportunities for traders. In fact, all key Forex trend reversals are driven by such macroeconomic shifts.

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Category: Trade Resources

The Forex market operates as a decentralized network where the world's major currencies can be traded one against another in a 24-hour basis, from Monday to Friday...

Introduction to the Foreign Exchange Market

With daily volumes exceeding USD 5 trillion, the Foreign Exchange Market, or Forex, is the largest financial market in the world. It operates as a decentralized network where the world’s major currencies are traded against one another on a 24-hour basis, from Monday to Friday.

 

The Short History of the Modern Currency Market

 

After the end of World War II, the Bretton Woods Agreement (1944) laid the foundation for a new global monetary system. Under this agreement, a country’s currency was pegged to a specific quantity of gold. When the Bretton Woods system ended in the 1970s, it gave rise to the modern Floating Currency System. In this system, the value of each currency fluctuates based on supply and demand dynamics.

  • In 1971, the CME (Chicago Mercantile Exchange) became the first exchange to offer currency trading through the International Monetary Market (IMM).
  • Following 1990, advances in information technology paved the way for a fully computerized trading environment—today known as the Online Forex Market.

More: » World’s Exchange Rates History

 

Today, hundreds of online brokers provide access to the Foreign Exchange Market. These brokerage firms typically fall into three main categories:

(1) ECN Brokers (Non-Dealing Desk)

(2) STP Brokers (Non-Dealing Desk)

(3) Market Makers (Dealing Desk)

More: » Brokers for Forex Investors

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Category: Trading Rules

 

Nassim Nicholas Taleb is a Lebanese-American mathematical statistician, author, risk analyst, and options trader. His work centers on uncertainty, randomness, and probability. He developed the risk-hedging technique known as 'Tail risk hedging' or 'Black Swan protection,' which aggregates portfolio exposure to guard against extreme market volatility. According to the Sunday Times, his 2007 book The Black Swan is one of the twelve most influential books since World War II.

 

Nassim Nicholas Taleb's Background

 

Born in 1960, Nassim Nicholas Taleb is a Lebanese-American scholar, former trader, and risk analyst known for redefining how we view uncertainty and randomness. His trading experience on Wall Street shaped his skepticism of traditional risk models.

  • Taleb’s key idea is the Black Swan—rare, high-impact events often ignored by conventional thinking. His 2007 book The Black Swan highlights how underestimating randomness leads to major failures.
  • He developed tail risk hedging, a strategy that protects portfolios from extreme market swings through asymmetric payoffs—small losses for large gains during crises.
  • His Incerto series explores concepts like Antifragility (systems that grow stronger from disorder), Skin in the Game (risk accountability), and the Lindy Effect (longer life for enduring ideas).
  • Though sometimes controversial, Taleb’s ideas influence finance, economics, and policy, advocating humility and robust systems in uncertain times.