Forex Traffic and Wall Street – A Brief History
September 2, 2009 by George Everhard
Filed under Forex Market
A large number of commercial companies are actively involved in the Forex market. About twenty-five percent of large corporations hedge against currency fluctuations in this manner.
For an US based company, when the dollar is strong during their reporting period, accounting for its foreign earned revenue can result in a negative performance. That’s because foreign-currency denominated revenue will exchange for fewer dollars when converted and reflect negatively for the accounting period. Having a Wall Street Journal subscription will help find this data.
By some estimates, five to ten percent of Forex activity is the result of pure hedging activity by governments and business. The rest of trading activity is blatant speculation.
The foreign exchange markets have been the playground of governments, corporations, banks as well as high-profile traders such as Warren Buffet and George Soros. Many speculators have made consistent net profits. For instance, George Soros “broke the Bank of England” by shorting the pound and walked away with a cool $1-billion profit in a single day.
Forex activity is heaviest in New York from Wall Street between the hours of 8 AM to 5 PM and account for about fifteen percent of all trades. Tokyo accounts for about 10% of trades and is most active 7 PM to 3 AM EST.
Making money on Forex is a matter of predicting price and using an effective exit strategy. Many systems exist that allow speculators to capture profits as certain conditions develop.
Professional Wall Street traders usually use a system that allows them to place trades several times a day. Because they trade several times a day, they are called day traders.
There are many financial news services to choose from. The Wall Street Journal’s reputation for acute accurate market coverage is legendary. In order to stay abreast of the constantly changing financial landscape, it pays to subscribe to the Wall Street Journal.
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