A Pig Table by Ed Stein

May 2010 Comment:

It's the rare little builder that has made his financial house wholly out of gold, whereas those having none at all is the all-too-common state of affairs down at Old MacDonald's farm.

With just a little gold you could have a solid foundation on which to regroup and rebuild. And with just a little more you might have a complete storm shelter in which to calmly endure the winds of change.

The choice is yours. Choose gold -- the 'bacon' you save may soon be your very own.

Did Gold Really Go Down?

US Dollar Strength, Weakness, the price of Gold

When the US Dollar gets stronger, it takes fewer dollars to buy any commodity that is priced in $USD. When the US Dollar gets weaker it takes more dollars to purchase the same commodity.

The price of all US Dollar denominated commodities, like gold, will change to reflect the fact that it will take fewer or more dollars to buy that commodity. So it’s quite possible, in fact it’s almost always the case that a portion of the change in the price of gold is really just a reflection of a change in the value of the US Dollar. Sometimes that portion is insignificant. But often the opposite is true where the entire change in the gold price is simply a mathematical recalculation of an ever-changing US Dollar value.

When the dollar gets strong, gold appears to go down, and vice versa. That accounts for part of the fluctuations that we see in the value of gold.

The other part is an actual increase in the supply or demand for gold. If the price is higher when being measured not only in US Dollars, but also in Euros, Pounds Sterling, Japanese Yen, and every other major currency, then we know the gold demand is higher and it has actually increased in value.

Consequently, if gold is higher in US Dollars while at the same time cheaper in every other currency, then we can conclude that the US Dollar has weakened, and that gold has actually lost value in all other currencies. But the price, because it is being quoted in $USD will be higher and give the illusion of gold becoming more valuable. In such a case the devaluation of gold, due to increased supply on the market, is camouflaged by a weakened US Dollar.

Our feature on kitco.com breaks the change of the price of gold into 2 components. One part shows you how much of that change can be attributed to US Dollar strength, or lack of it. The other portion is indicative of how much the price changed as a result of normal trading. Interestingly whatever changes happen to the price of gold as a result of US Dollar strength/weakness also occurs to every other US Dollar denominated commodity by the exact same proportion.

How Forex Brokers Make a Money?

There are many ins and outs of the foreign exchange trading process. There's so much to make within currency trading, but most people are not aware of its details, how it works, or the art of making smart moves in the world of Forex.

Forex brokers act as consultants when it comes to making decisions in the process and strategies of foreign exchange and are paid for their expertise in such skills and executing the easiest ways to access the market. They are paid a commission (read more about forex broker commission) based on the results of your spread and you rely on their dependency and ability to provide advice and accommodate your trading efforts.

There are some aspects and details of the market and applicable time sensitive economic strategies that you should make sure your broker has the ability to discern and translate. They should be able to help you understand how your investment is being handled and why.

Your forex broker should definitely be accredited with the abilty to make you comfortable with their familiarity with the ever changing rules and terms established by foreign exchange trading authorities. They should also be able to express their competency in communicating the causes and effects of current market conditions, what rates are available, and every detail possible in allowing you to make practical trades.

A proficient and respectable broker also makes it a point to keep your cost for variable commissions in currency trading down to a minimum. You should not be approached with outstanding trading prices if your broker understands the idea of initially trading in small quantities until you have developed a long lasting respectable relationship. You then begin to understand and adopt your broker's hopefully successful and experienced trading skills.

When talking to your broker, be able to determine whether or not he or she remains current with foreign currency news, economic and market trends, and has the ability to regularly and readily report this information to you without or upon your request. A skilled broker should provide you with the necessary dosage of information in order to make successful trades without overwhelming you with too much currency trading minutia.

These are all definitely important characteristics of a skilled forex broker. One that possesses a well rounded combination of all exhibits the reasons why they are paid to do their job and their ability to earn commissions based on the success of your currency trading campaigns you experience with them. Experiencing these qualities first hand, you should be able to better comprehend how a successful broker makes a living.

How to Become a Forex Broker

It is a fact that you can make money with currency trading on Forex. Indeed, Forex investing is one of the most potentially rewarding types of investments available. Since individual traders and companies have equal chance to expand in Forex trading, we all have the option to becoming a forex trading broker in order to generate more revenue.

In order to help with your trading strategy and transactions, it is recommended that you must find a forex broker if you are new to the FOREX. The forex broker acts as a liaison of the client to the forex market, which provides technical analysis and research of the market situation and guides the client on the methods of trade as well. All of the information he provides is believed to increase the client's profit.

Before I will discuss on how to become a forex broker, here are some reasons why should you become one. As a forex trading broker you provide your customers access to the freedom that comes from actively trading their own money online on secure forex trading platforms. Since you offer your clients some money making opportunities and some investments, you are then greatly improving the scope and reputation of your own business leading to greater client retention levels. Aside from the fact that you are paid a commission you can also take advantage of the explosive growth in the demand for alternative investments by offering your high-net worth clients a managed forex account.

Becoming a forex broker is simple. A currency trading broker in the Forex trading market is like being a realtor in the property market. Here are steps to becoming one. Becoming Licensed and Registered. Sign on to a licensed business or seek appropriate securities license and fill out a registration form with the SEC in order to be a full service broker. Take note that licensing is different depending on which state you live in. If you move from state to state, license is not always acknowledged. You’re ready to start trading once registered.

However, if you want to become a business broker only and not a full service forex broker, you may work at a brokerage house. You may either go to school or try to learn forex trading by yourself in order to get license. Remember, knowledge is power for the successful broker! A successful forex broker is aware of what’s happening in the world. Forex brokers research heavily on all political and economic news from the countries for which they hold currency.

Forex brokers are much like any other broker that act as the middleman for the individual and the market itself. They key to a successful forex broker is to get licensed and educated about how the market works. With this article you now have information on how to become a forex broker. Get licensed and registered and start forex trading. Soon you will just be sitting up in your multi-million dollar offices.

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