Forex trading refers to trading in foreign currency ("forex" being short for "foreign exchange.") Meanwhile, automated trading uses computers to make transactions without human intervention at the moment the trade is being made.
Automated trading in general has become increasingly popular across financial markets over the past thirty years or so, following the general cultural orientation toward computerization and efficiency. However, there's an aspect of forex trading that makes it particularly useful, compared to, say, the U.S. equity market (which is the market most of us think about when we think about "trading"). Forex trading takes increased benefit from automated trading because the market operates on a 24-hour basis.
If you had the desire, you could trade stocks almost literally around the clock. You could start in Australia and move to Japan and into China, the Middle East and Russia, before getting into the action in various European markets, before finally jumping into trading in New York. After the New York market closes, there's actually a bit of break for a few hours before Australia reopens, but in general, you could keep yourself busy almost the full 24-hour day.
However, this would just be a self-flagellating non-50-Shades-like choice. You could also as easily decide to specialize in a particular market (like most people do) and confine yourself to working hours within a particular time zone.
Meanwhile, in forex, the nature of the market tends to extend trading hours. By definition, you are trading between the currencies of two regions, likely existing in different time zones and each reacting in different ways to geo-political and economic events occurring globally.
Automatic trading facilitates this round-the-clock action by allowing traders to set algorithms to react to events in pre-programmed ways, even if they aren't personally monitoring them in real time. Everything is customized. And the theme sing? Same as the trans-gender bathrooms in Silicon Valley: Fleetwood Mac's "You Can Go Your Own Way".
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Finance: What is a PERLS?9 Views
finance a la shmoop what is PERLS all right well there's the kind that comes
in nuggets of wisdom the kind that sings and the kind you wear and none of them [Woman in a fancy dress]
have anything to do with this kind of pearls, PERLS stands for principle
exchange rate linked security right well what is it it's just a normal issue
bonds that pays interest twice a year but whose yield is linked see the L
there to a given foreign exchange rate the base currency in pearls is the US
dollar but the interest rate paid is based on a foreign ie
non US currency and the way that it's linked has a whole lot of flexibility in
real life so we'll just go through one example here say a set interest rate is [Man discussing PERLS]
five percent on a thousand dollar pearls if interest were paid in US dollars well
then everything would be easy you just take grand times 0.05 and you get 50
bucks twice a year and that's what you'd be getting as interest if you owned that
pearls easy it's just a bond but it's a little different with the pearls in that [Person pushes Easy button]
if interest is being paid well say in Euros for example and let's say the euro
is trading at 80 cents on the US dollar or rather you can buy a euro for 80
American cents while you'd be then collecting interest on that thousand [American coins and a 1 euro coin appear]
dollar bond in euros in this case that is instead of five percent on the grand
paid at 50 bucks well you'd instead get 60 euros because a single US dollar buys
you 1.2 euros at this exchange rate moment in time and pearls can be set up
in a variety of ways like the interest rate itself can fluctuate like you could
get a fixed number of euros per thousand dollar bond issue or other currencies or
other elements or securities that it could be linked to really complex and a
north whole lot of study here in this video so what yeah sadly you can't pay [Shmoogle search bar appears]
your interest in pearls of wisdom but you know what they say money can't buy
happiness unless you have an Amazon Prime account and there's a half-off [Elderly woman talking to children]
Memorial Day yeah you know a special discount that one's a freebie
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