Your credit score helps determine what you’ll pay for credit or insurance.

By Quiz Online Labels: at September 12, 2017

<div dir="ltr" style="text-align: left;" trbidi="on">
 
Keywords: 
credit, scoring, insurance, score, report, credit report, systems, —, company, scoring systems, companies, information, credit scoring 
 
 
Article Body: 
Ever wonder how a lender decides whether to grant you credit? For years, creditors have been using credit scoring systems to determine if you’d be a good risk for credit cards, auto loans, and mortgages. These days, many more types of businesses — including insurance companies and phone companies — are using credit scores to decide whether to approve you for a loan or service and on what terms. Auto and homeowners insurance companies are among the businesses that are using credit scores to help decide if you’d be a good risk for insurance. A higher credit score means you are likely less of a risk, and in turn, means you will be more likely to get credit or insurance — or pay less for it. 
 
What is credit scoring? 
 
Credit scoring is a system creditors use to help determine whether to give you credit. It also may be used to help decide the terms you are offered or the rate you will pay for the loan. 
 
Information about you and your credit experiences, like your bill-paying history, the number and type of accounts you have, whether you pay your bills by the date they’re due, collection actions, outstanding debt, and the age of your accounts, is collected from your credit report. Using a statistical program, creditors compare this information to the loan repayment history of consumers with similar profiles. For example, a credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points — a credit score — helps predict how creditworthy you are — how likely it is that you will repay a loan and make the payments when they’re due. 
 
Some insurance companies also use credit report information, along with other factors, to help predict your likelihood of filing an insurance claim and the amount of the claim. They may consider these factors when they decide whether to grant you insurance and the amount of the premium they charge. The credit scores insurance companies use sometimes are called “insurance scores” or “credit-based insurance scores.” 
 
Credit scores and credit reports 
 
Your credit report is a key part of many credit scoring systems. That’s why it is critical to make sure your credit report is accurate. Federal law gives you the right to get a free copy of your credit reports from each of the three national consumer reporting companies once every 12 months. 
 
The Fair Credit Reporting Act (FCRA) also gives you the right to get your credit score from the national consumer reporting companies. They are allowed to charge a reasonable fee, generally around $8, for the score. When you buy your score, often you get information on how you can improve it. 
 
To order your free annual report from one or all the national consumer reporting companies, and to purchase your credit score, call toll-free 877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P. O. Box 105281, Atlanta, GA 30348-5281 
 
How is a credit scoring system developed? 
 
To develop a credit scoring system or model, a creditor or insurance company selects a random sample of its customers, or a sample of similar customers, and analyzes it statistically to identify characteristics that relate to risk. Each of the characteristics then is assigned a weight based on how strong a predictor it is of who would be a good risk. Each company may use its own scoring model, different scoring models for different types of credit or insurance, or a generic model developed by a scoring company. 
 
Under the Equal Credit Opportunity Act (ECOA), a creditor’s scoring system may not use certain characteristics — for example, race, sex, marital status, national origin, or religion — as factors. The law allows creditors to use age in properly designed scoring systems. But any credit scoring system that includes age must give equal treatment to elderly applicants. 
 
What can I do to improve my score? 
 
Credit scoring systems are complex and vary among creditors or insurance companies and for different types of credit or insurance. If one factor changes, your score may change — but improvement generally depends on how that factor relates to others the system considers. Only the business using the scoring knows what might improve your score under the particular model they use to evaluate your application. 
 
Nevertheless, scoring models usually consider the following types of information in your credit report to help compute your credit score: 
 
Have you paid your bills on time? You can count on payment history to be a significant factor. If your credit report indicates that you have paid bills late, had an account referred to collections, or declared bankruptcy, it is likely to affect your score negatively. 
 
Are you maxed out? Many scoring systems evaluate the amount of debt you have compared to your credit limits. If the amount you owe is close to your credit limit, it’s likely to have a negative effect on your score. 
 
How long have you had credit? Generally, scoring systems consider the length of your credit track record. An insufficient credit history may affect your score negatively, but factors like timely payments and low balances can offset that. 
 
Have you applied for new credit lately? Many scoring systems consider whether you have applied for credit recently by looking at “inquiries” on your credit report. If you have applied for too many new accounts recently, it could have a negative effect on your score. Every inquiry isn’t counted: for example, inquiries by creditors who are monitoring your account or looking at credit reports to make “prescreened” credit offers are not considered liabilities. 
 
How many credit accounts do you have and what kinds of accounts are they? Although it is generally considered a plus to have established credit accounts, too many credit card accounts may have a negative effect on your score. In addition, many scoring systems consider the type of credit accounts you have. For example, under some scoring models, loans from finance companies may have a negative effect on your credit score. 
 
Scoring models may be based on more than the information in your credit report. When you are applying for a mortgage loan, for example, the system may consider the amount of your down payment, your total debt, and your income, among other things. 
 
Improving your score significantly is likely to take some time, but it can be done. To improve your credit score under most systems, focus on paying your bills in a timely way, paying down any outstanding balances, and staying away from new debt. 
 
Are credit scoring systems reliable? 
 
Credit scoring systems enable creditors or insurance companies to evaluate millions of applicants consistently on many different characteristics. To be statistically valid, these systems must be based on a big enough sample. They generally vary among businesses that use them. 
 
Properly designed, credit scoring systems generally enable faster, more accurate, and more impartial decisions than individual people can make. And some creditors design their systems so that some applicants — those with scores not high enough to pass easily or low enough to fail absolutely — are referred to a credit manager who decides whether the company or lender will extend credit. Referrals can result in discussion and negotiation between the credit manager and the would-be borrower. 
 
What if I am denied credit or insurance, or don’t get the terms I want? 
 
If you are denied credit, the ECOA requires that the creditor give you a notice with the specific reasons your application was rejected or the news that you have the right to learn the reasons if you ask within 60 days. Ask the creditor to be specific: Indefinite and vague reasons for denial are illegal. Acceptable reasons might be “your income was low” or “you haven’t been employed long enough.” Unacceptable reasons include “you didn’t meet our minimum standards” or “you didn’t receive enough points on our credit scoring system.” 
 
Sometimes you can be denied credit or insurance — or initially be charged a higher premium — because of information in your credit report. In that case, the FCRA requires the creditor or insurance company to give you the name, address, and phone number of the consumer reporting company that supplied the information. Contact the company to find out what your report said. This information is free if you ask for it within 60 days of being turned down for credit or insurance. The consumer reporting company can tell you what’s in your report; only the creditor or insurance company can tell you why your application was denied. 
 
If a creditor or insurance company says you were denied credit or insurance because you are too near your credit limits on your credit cards, you may want to reapply after paying down your balances. Because credit scores are based on credit report information, a score often changes when the information in the credit report changes. 
 
If you’ve been denied credit or insurance or didn’t get the rate or terms you want, ask questions: 
 
Ask the creditor or insurance company if a credit scoring system was used. If it was, ask what characteristics or factors were used in the system, and how you can improve your application. 
 
If you get the credit or insurance, ask the creditor or insurance company whether you are getting the best rate and terms available. If you’re not, ask why. 
 
If you are denied credit or not offered the best rate available because of inaccuracies in your credit report, be sure to dispute the inaccurate information with the consumer reporting company. 
 
 </div>

Keywords: credit, scoring, insurance, score, report, credit report, systems, —, company, scoring systems, companies, information, credit ...

Comparing The Forex With Investing In Insurance

By Quiz Online Labels: at September 12, 2017

<div dir="ltr" style="text-align: left;" trbidi="on">
 
Summary: 
Investing in Forex is more risky but the gains that can be achieved are a lot larger than insurance, although insurance is a very good long term investment. 
 
While there are innumerable kinds of life insurance available, they can be simplified into two general types: those that insure against death only and those that not only insure against death but make a provision for savings in addition to insuring. The first type is called term insurance. 
 
It pays off only in the ev... 
 
 
Keywords: 
forex,forex software,forex trading software,forex tips,forex broker,insurance 
 
 
Article Body: 
Investing in Forex is more risky but the gains that can be achieved are a lot larger than insurance, although insurance is a very good long term investment. 
 
While there are innumerable kinds of life insurance available, they can be simplified into two general types: those that insure against death only and those that not only insure against death but make a provision for savings in addition to insuring. The first type is called term insurance. 
 
It pays off only in the event of death. While it is worth nothing to the individual himself, since he never gets his hands on any of the money that went to pay the premiums, it does generally provide the maximum death benefits per dollar of premiums at the younger ages. Its sole purpose is to insure against death. As its name implies, it is written for a term—1, 5, 10, 20, 25 or 30 years—and if the term expires before the insured dies, that is that. There are no more premiums due and he gets nothing from the insurance company except the right to renew the policy for a longer term and/or the right to convert the policy to permanent insurance without a medical examination. 
 
Policies other than term insurance cost more than term insurance initially and the additional premium provides essentially one thing savings for the person insured. Now the main question to answer from an investor's point of view is, "What do I get for this additional premium in the way of a return on my money?" 
 
If a ten-year term policy is purchased the average net cost per $1,000 is $3.91 per year, and if a 20-year term policy is purchased the average net cost is $3.82. It gradually goes down according to the length of the policy, but if term insurance were bought each year, for just one year, the annual rate would be higher with each renewal since the older a person is the greater the likelihood of his death. 
 
If he waits until he gets to age 55 the cost of term insurance rises tremendously. A five-year term policy at age 55 costs $21.85 per $1,000 and a ten-year policy $23.26. Term insurance usually may be maintained only until the insured is age 65. Thus, if a man kept term insurance to age 65, but died at age 66, his beneficiaries would get nothing and all of the premiums he had paid for this insurance would go down the drain. 
 
These policies all provide nothing in the way of savings and there is no return on your money that you, the insured, will ever get. Your beneficiaries will get the face of the policy at your demise. 
 
In contrast to term insurance there is permanent insurance. This is insurance that may be kept as long as the insured wishes to keep it. If the insured lives, he has built up a substantial cash value in his policy which he may take in cash or as income or which he may leave with the insurance company as "paid up" insurance. 
 
The most popular form of permanent life insurance is convertible whole life insurance, sometimes called ordinary life or straight life. 
 
Convertible life requires the lowest premium of all permanent insurance plans. Premiums may be paid on this policy as long as the insured lives or for a shorter period of time depending upon the objective of the insured. 
 
Permanent insurance has a level annual premium for the duration of the premium paying period. The annual premiums in the early policy years are in excess of the actual premium needed to cover the risk. The excess premium is called the reserve and it is this reserve, together with interest earned on the reserve plus future earnings, which provide the cash needed to pay death claims in the later years. 
 
If we consider that the 20-year term rate is the pure cost of insurance, and that the difference between this rate and the straight life rate represents the savings element of his premiums, you determine this savings element by subtracting $3.82 from $17.70, which equals $13.88. Over 20 years this savings element amounts to $277.60. For this total of $277.60 put in in premiums, $403.94 was collected—a profit of $126.34 over 20 years, or $6.31 per year. 
 
The $277.60 was not put in all at once, but over a period of 20 years. Nothing was invested at the beginning of the 20-year period, and in the twentieth year the whole sum was invested, so that the average investment for the period was halfway between nothing and $277.60—$138.80. The return on this figure is the true return, and $6.31 per year on $138.80 is a little under 5%. 
 
Let us consider the Retirement Income policy at 65, bought by a person 25 years old. Over a period of 40 years, he puts in $30.92, the annual premium, times 40, or $1,236.80. If the average net cost of the pure insurance feature is assumed at $7.79 per annum and the cost is subtracted from the total annual premium of $30.92, we get the investment in the savings element of the insurance, $23.13 times 40, or $925.20. For these invested savings the insured gets back $2,326.81 at age 65-40 years later-a profit of $1,401.61. 
 
If we use the same reasoning in regard to the average amount invested over the period (one half of $925.20), we arrive at an investment of $462.60. The profit or return per year is determined by dividing the total profit of $1,401.61 by 40 years and we get $35 per year. This $35 represents a return on the investment of $462.60, or 7½% per year. 
 
How good an investment is this $462.60 that grows to $2,326.81 in 40 years? It is almost identical with an investment of $462.60 which returns 4% per year if the 4% is left in the investment to be compounded annually. The discrepancy between the 7½% per year and the 4% is explained by compounding. 
 
The 4% compounded is not a bad yield. It is roughly equal to the return of an insured building and loan association in the year 1962, but not as good as the better yielding ones. 
 
Now the characteristic of the Retirement Income policy is that premium payments end at age 65. The insured is now entitled to $2,326.81 if he left his dividends in. 
 
Further, the insured can have his $1,597 (due him if he took his dividends out) paid to him and/or his heirs at the rate of about $10.00 per month for 157 months (a full refund). If he is still living at the end of the 157 months, the insured would continue to receive $10.00 per month for the balance of his lifetime. 
 
If desired, an alternate amount or alternate type of annuity could be selected. 
 
In addition to the guaranteed amounts, there would, of course, be dividend income payable each month in accordance with the company practice. The present income dividend is about 10% extra per month. 
 
All of the above income would be tax-favored as compared to ordinary investment income. 
 
The income or annuity return per $1,000 of accumulated cash in the insurance policy is guaranteed by contract as of the date of issue for future delivery. It is interesting to note that the cost of an annuity at 65 has been increased seven times in the last 20 years as the science of geriatrics has prolonged life. 
 
There is one type of policy which represents the savings element alone and does not provide the insurance element. This is the annuity. You make a cash payment early in life, or periodic payments throughout your life, in order to get an income when you retire or pass a certain age. 
 
At age 25, for an annual premium of $100 for 40 years, you can get (a) $8,201.47 in cash at age 65 or (b) monthly payments of $51.34 for the rest of your life. 
 
You have invested in 40 years 40 times $100 or $4,000, and at age 65 this has grown to $8,201.47. It has better than doubled. 
 
To find the average annual return, we determine the profit ($8,201.47 less $4,000) which equals $4,201.47 and divide this by 40 to get an annual profit of $105. 
 
The average investment is halfway between zero and $4,000 and is equal to $2,000. The annual return is thus $105 divided by $2,000, or 5¼%. This represents considerably less than 4% compounded annually. 
 
If the option of $51.34 per month is selected instead of the sum total of $8,201.47, it takes between 13 and 14 years to exhaust the total, and if you live longer than this number of years, you have come out ahead. 
 
Most other policies provide savings, and the return on these savings is what we are concerned with here. While the yield on the savings is low it must be pointed out that by entering into an insurance contract the insured is forced to save what he might otherwise spend. A second advantage in buying policies other than term policies is that if the insured falls on hard times these policies are worth something in cash to help tide him over; and if he can't keep up the premiums there is a cash reserve to pay premiums for awhile. If term insurance premiums cannot be met the policy lapses. 
 
One insurance company took what it considered to be a typical year as regards death claims and determined what the insured's family got back in relation to what was paid. It determined that the average insured who was paid off that year collected $1.75 for every $1.00 put into premiums, and the average number of years each policy had been in force at the time of death was 22.6. The return was 4% per year, and the insurance company points out that the 4% return was tax free in that no income tax was taken out either as the policy went along or when final payment was made. This 4% equals 8% in income for a person in the 50% tax bracket. 
 
The return on the savings element of life insurance can be determined by reference to the attached table. The major types of policy have been compared for ages 25, 40 and 55 as to annual premium, value of the policy in cash at different ages and monthly payments which can be received from age 65 to the end of one's life. 
 
Two of the greatest benefits of life insurance depend on: (1) inheritance taxes and (2) the uncertainty as to when the insured will die. These factors are not related directly to return on investment but cannot be minimized in any consideration of life insurance. 
 
Long term it is very difficult to lose money if not impossible and the returns can be good. 
 
The Forex is more risky but you can limit your risk by using good Forex software. 
 
 </div>

Summary: Investing in Forex is more risky but the gains that can be achieved are a lot larger than insurance, although insurance is a ver...

Forex Currency Trading Explained

By Quiz Online Labels: at September 12, 2017

<div dir="ltr" style="text-align: left;" trbidi="on">
 
Summary: 
FOREX MARKET HOURS 
At 7:00 pm Sunday, New York time, trading begins as markets open in Tokyo, Japan. Next, Singapore and Hong Kong open at 9:00 pm EST, followed by the European markets in Frankfurt (2:00 am), and then London (3:00 am). By 4:00 am, the European markets are in full swing, and Asia has concluded their trading day. The U.S. markets open first in New York around 8:00 am Monday, as Europe winds down. Australia will take over around 5:00 pm, and by 7:00 pm Tokyo i... 
 
 
Keywords: 
forex trading,currency trading,forex, fxtrading, peter bain, 
 
 
Article Body: 
FOREX MARKET HOURS 
At 7:00 pm Sunday, New York time, trading begins as markets open in Tokyo, Japan. Next, Singapore and Hong Kong open at 9:00 pm EST, followed by the European markets in Frankfurt (2:00 am), and then London (3:00 am). By 4:00 am, the European markets are in full swing, and Asia has concluded their trading day. The U.S. markets open first in New York around 8:00 am Monday, as Europe winds down. Australia will take over around 5:00 pm, and by 7:00 pm Tokyo is ready to re-open. 
 
All times are quoted in Eastern Standard Time (New York). 
 
FX or Forex, currency trading is the trading of one currency against another. In terms of trading volume, the currency exchange market is the world's largest market, with daily trading volumes in excess of $1.5 trillion US dollars. This is orders of magnitude larger than the bond or stock markets. The New York Stock Exchange, for example, has a daily trading volume of approximately $50 billion. 
 
Currencies are traded for hedging and speculative purposes. Various market participants such as individuals, corporations, and institutions trade forex for one or both reasons. 
 
Corporate treasurers, private individuals and investors have currency exposures during the the regular course of business. The FXTrade Platform is an ideal platform to hedge any such exposure. An investor, who has bought a European stock and expects the EUR exchange rate to decline, can hedge his currency exposure by selling the EUR against the USD. 
 
Currency markets are ideally suited for speculative trading. The foreign exchange market has a daily volume in excess of 1.5 trillion USD, which is 50 times the size of the transaction volume of all the equity markets taken together. This makes the foreign exchange market, by far, the most liquid and efficient financial market of the world. Thanks to its efficiency, there is little or no slippage of market price for the execution of even large buy and sell orders. Traders are able to take advantage of intra-day volatility thanks to the low spreads and enter positions for short time periods, such as minutes and hours. Unlike equity trading, where restrictions limit a trader's ability to profit from a market down turn, there are no such constraints on currency trading. Currency traders can take advantage of both up and down trends thus increasing their profit potential. 
 
The most commonly traded currencies are: USD, EUR, JPY, GBP, CHF, CAD and AUD. 
 
The most commonly traded currency pair is EUR/USD. 
 
Forex Symbol Guide 
Symbol Currency Pair Trading Terminology 
GBP/USD British Pound / US Dollar "Cable" 
EUR/USD Euro / US Dollar "Euro" 
USD/JPY US Dollar / Japanese Yen "Dollar Yen" 
USD/CHF US Dollar / Swiss Franc "Dollar Swiss", or "Swissy" 
USD/CAD US Dollar / Canadian Dollar "Dollar Canada" 
AUD/USD Australian Dollar / US Dollar "Aussie Dollar" 
EUR/GBP Euro / British Pound "Euro Sterling" 
EUR/JPY Euro / Japanese Yen "Euro Yen" 
EUR/CHF Euro / Swiss Franc "Euro Swiss" 
GBP/CHF British Pound / Swiss Franc "Sterling Swiss" 
GBP/JPY British Pound / Japanese Yen "Sterling Yen" 
CHF/JPY Swiss Franc / Japanese Yen "Swiss Yen" 
NZD/USD New Zealand Dollar / US Dollar "New Zealand Dollar" or "Kiwi" 
USD/ZAR US Dollar / South African Rand "Dollar Zar" or "South African Rand" 
GLD/USD Spot Gold "Gold" 
SLV/USD Spot Silver "Silver" 
 
CURRENCY PAIRS 
All currencies are assigned an International Standards Organization (ISO) code abbreviation. In currency trading, these codes are often used to express which specific currencies make up a currency pair. For example, USD/JPY refers to two currencies: the US Dollar and the Japanese Yen. 
 
SPOT FOREX 
Spot foreign exchange is always traded as one currency in relation to another. So a trader who believes that the dollar will rise in relation to the Euro, would sell EUR/USD. That is, sell Euros and buy US dollars. The following is guide for quoting conventions: 
 
What does it mean to be "long" or "short" a currency? 
Being long means buying a currency. Being short means selling a currency. 
If a trader goes long USD/JPY, he or she buys US Dollars and sells Japanese Yen. Buying a currency is synonymous with taking a long position in that currency. A trader takes a long position in a currency if he or she believes it will appreciate in value. 
If a trader goes short USD/JPY, he or she sells US Dollars and buys Japanese Yen. Selling a currency is synonymous with shorting that currency. A trader would short a currency if he or she believes it will depreciate in value. 
 
CURRENCY TRADING: BUYING AND SELLING CURRENCIES 
All Forex trades result in the buying of one currency and the selling of another (currency trading), simultaneously. 
 
Buying ("going long") the currency pair implies buying the first, base currency and selling an equivalent amount of the second, quote currency (to pay for the base currency). It is not necessary to own the quote currency prior to selling, as it is sold short. A trader buys a currency pair if he/she believes the base currency will go up relative to the quote currency, or equivalently that the corresponding exchange rate will go up. 
 
Selling ("going short") the currency pair implies selling the first, base currency, and buying the second, quote currency. A trader sells a currency pair if he/she believes the base currency will go down relative to the quote currency, or equivalently, that the quote currency will go up relative to the base currency. 
 
An open trade or position is one in which a trader has either bought or sold one currency pair and has not sold or bought back an adequate amount of that currency pair to effectively close the trade. When a trader has an open trade or position, he/she stands to profit or lose from fluctuations in the price of that currency pair. 
 
Forex is the backbone of all international capital transactions. Compared to the slim profit margins rendered in other areas of commercial banking, huge profits are generally produced in a matter of minutes form minor currency market movements. Some banks generate 60% of their profits from trading currency aggressively. 
 
Trading volume has been growing at a rate of 25% per year since the mid-1980s and therefore it is not difficult to accept the notion that the currency market is one of the world fastest growing industries. What used to require days to accomplish in Europe or Asia now oly takes a few minutes. Needless to say, technology has changed everything and millions of Dollars are moved from one currency into another every second of every day by major banks through computers and for the average investor, with the touch of a computer key. 
 
Foreign exchange is the backbone of all international capital transactions. Compared to the slim profit margins rendered in other areas of commercial banking, huge profits are generally produced in a matter of minutes from minor currency options market movements. Some banks generate up to 60% of their profits from trading currency aggressively. 
 
Transactions in foreign currencies take place when one country's currency is purchased (exchanged) with another country's currency. The price agreed upon or negotiated for the currency purchased is referred to as the foreign exchange rate. Major commercial banks in the money market centers throughout the world are responsible for the majority of foreign currencies bought and sold. 
 
Trading volume has been growing at a rate of 25% per year since the mid-1980s and therefore it is not difficult to accept the notion that the currency options is the world\'s fastest growing industry. What used to require days to accomplish in Europe or Asia now only takes a few minutes. Needless to say, technology has changed everything and millions of Dollars are moved from one currency into another every second of every day by major banks through computers and for the average investor, with the touch of a phone. 
 
FOREX BASICS - What's a PIP 
A "pip" is the smallest increment in any currency pair. In EUR/USD, a movement from .8951 to .8952 is one pip, so a pip is .0001. In USD/JPY, a movement from 130.45 to 130.46 is one pip, so a pip is .01. 
 
CALCULATING THE WORTH OF A PIP 
How much in dollars is this movement worth, for example, per 10,000 Euros in EUR/USD? How much is one pip worth per 10,000 Dollars in USD/JPY? We will refer to the size, in this case 10,000 units of the base currency, as the "Notional Amount". The formula for calculating a pip value is therefore: 
 
(one pip, with proper decimal placement / currency exchange rate) x (Notional Amount) 
 
Using USD/JPY as an example, this yields: 
 
(.01/130.46) x USD 10,000 = $0.77 or 77 cents per pip 
 
Using EUR/USD as an example, we have: 
 
(.0001/.8942) x EUR 10,000 = EUR 1.1183 
 
But we want the pip value in USD, so we then must multiply EUR 1.1183 x (EUR/USD exchange rate): EUR 1.1183 x .8942 = $1.00 
 
This is in fact a phenomenon you will see with any currency in which the currency is quoted first (such as EUR/USD or GBP/USD): the pip value is always $1.00 per 10,000 currency units. This is why pip (or "tick") values in currency futures, where the currency is quoted first, are always fixed. 
 
Approximate pip values for the major currencies are as follows, per 10,000 units of the base currency: 
 
USD/JPY: 1 pip = $.77 (i.e. a change from 130.45 to 130.46 is worth about $.77 per $10,000) 
 
EUR/USD: 1 pip = $1.00 (.8941 to .8942 is worth $1.00 per 10,000 Euros) 
 
GBP/USD: 1 pip = $1.00 (1.4765 to 1.4766 is worth $1.00 per 10,000 Pounds) 
 
USD/CHF: 1 pip = $.59 (1.6855 to 1.6866 is worth $.59 per $10,000) 
 
Spread 
The spread is the difference between the price that you can sell currency at ( Bid) and the price you can buy currency at ( Ask). The spread on majors is usually 3 pips under normal market conditions. 
 
Market Hours 
The spot Forex market is unique to any other market in the world; trading 24-hours a day. Somewhere around the world a financial center is open for business and banks and other institutions exchange currencies every hour of the day and night, only stopping briefly on the weekend. Foreign exchange markets follow the sun around the world, giving traders the flexibility of determining their trading day and the ability to take advantage of global economic events. 
 
FOREX or The Foreign exchange rate market is an international market where various currency exchange transactions take place; this is in the shape of simultaneously buying one currency and selling another. The most commonly traded currencies are referred to as “Majors”; over 85% of daily transactions on Forex trading involve the Majors. These seven currencies are the US Currency (Dollar, USD), Japanese Yen (JPY), Euro (EUR), British Pound (GBP), Swiss Franc (CHF), Canadian Dollar (CAD) and Australian Dollar (AUD). The Forex system in operation today was established in the 1970s when free currency exchange rates were introduced, this period also saw the US Dollar overtake the British Pound as the benchmark currency. Prior to this and in particular during World War II, exchange rate remained more stable. 
 
Forex trading in simplest terms is the buying of one currency and the selling of another. Forex trading, also referred to, as “FX” is open to corporations, small businesses, commercial banks, investment funds and private individuals, it is the largest financial market in the world averaging a daily turnover of over $1 trillion dollars, making it a diverse and exciting market. It is a 24-hour market enabling it to accommodate constant changing world currency exchange rates . According to New York time, trading begins at 2.15pm on Sunday in Sydney and Singapore and progresses through to Tokyo at 7pm, London at 2am and reaches New York at 8am. This leaves investors free to respond to global political, economic and social events when they take place, day or night. 
 
Unlike trading on the stock market, the forex market is not conducted by a central exchange, but on the “interbank” market, which is thought of as an OTC (over the counter) market. Trading takes place directly between the two counterparts necessary to make a trade, whether over the telephone or on electronic networks all over the world. The main centres for trading are Sydney, Tokyo, London, Frankfurt and New York. This worldwide distribution of trading centres means that the forex market is a 24-hour market. 
 
 </div>

Summary: FOREX MARKET HOURS At 7:00 pm Sunday, New York time, trading begins as markets open in Tokyo, Japan. Next, Singapore and Hong K...