Expatriates Forums in South Africa

TRADING IN LINE Coaching in South Africa

Miky — Tue May 05, 2009 1:37 pm

Author: Miky

Posted: Tue May 05, 2009 1:37 pm

We have solid experience in ONE to ONE Trading On Line coaching and our coaching sessions are also on-line, via the internet.

We use a state-of-the-art remote-learning platform in which is possible to share audio, video, trading platform and desktop documents like trading charts.
In this way you can learn how to trade better and better from your home or office. Coaching plans can be completely personalized to reach concrete individual goals.
We are looking for private investors in South Africa interested in improving their Trading On Line results, on a pay per sessions basis.
michele.castorina@t-online.hu

Introducing Angola Trading Company

natachasamami — Sun Sep 14, 2008 9:58 pm

Author: natachasamami

Posted: Sun Sep 14, 2008 9:58 pm

Dear Sirs

JUVANA / JVN Lda group is established in 4 countries: Angola, Mauritania, Portugal and Poland.

Our business covers a wide range of activities, included:
- airline transport,
- trucks/cars,
- medical equipment (injector machine and cartridges for manufacture
flexible dental prosthesis, hospital clothes…)
- appareal & fashion: Spanish jeans fashion with high quality (STOCK
LIQUIDATION –all for 2,5 EUROS!!!!!), party dresses…
- fresh and frozen vegetables,
- feeding,
- drinks,
- brand products (Cocacola, Pringles, Toblerone , Redbull, Fructis Shampoo, corona beer…)
- office equipment,
- construction equipment,
- agriculture equipment (coffee and cocoa beans, vegetables, fruits…)
- breeding cattle / Livestock ( sheep, lamb, goat from Spain…),
- rubber,
- oil,
- electronic products,
- industrial valves ( gate valves, ball valves….)
- granite,
- Meat Halal (beef, lamb, chicken, buffalo…) & NO-Halal,
- ...and much more.

We are offering our services. In our site you will be able to find more
information about our products, addresses, telephone number, faxes….

Looking forward to hear from you soon please accept our best regards
Natacha Guimaraes
Product Manager
Skype : natacha116 (Portugal, Lisbon)
www,jvnonline,com

Spanish Jeans STOCK LIQUIDATION

natachasamami — Sun Sep 14, 2008 9:57 pm

Author: natachasamami

Posted: Sun Sep 14, 2008 9:57 pm

Dear Sir

JUVANA / JVN Lda group is established in 4 countries: Angola, Mauritania, Portugal and Poland.

Our business covers a wide range of activities, included: General Trading.

At this moment we are in Stock Liquidation of a High Cuality spanish
jeans, with ISO certificate, brand Cowest. Each pieces FOR ONLY 2,5
Euros EX-Spain.

They are differents sizes, colours, types... You can get more information about us and about this jeans in our website : (look in Stock).

The offer is only valid up to the end of the stock. They are 5200 pieces in the stock, and came in boxes of 20units (that make a total
of 260boxes).

In our website you can see photos of some models of this season. The
liquidation is for the seasons before, but the design is in the same line.

We can offer as well party and wedding dresses, and soon we will
expose in our website other articles that are available.

Thank you for your attention.
Best regards
Natacha Guimaraes
Product Manager
Skype: natacha116 (Portugal, Lisboa)
www,jvnonline,com

Livestock - Live Sheep, lamb and goat from Spain

natachasamami — Sun Sep 14, 2008 9:56 pm

Author: natachasamami

Posted: Sun Sep 14, 2008 9:56 pm

Dear Sir

The live sheep that we offer is named Sheep Manchega, is a high quality sheep, with a very good quality of meat.

We have for meat proporse (old sheep) and for breeding proporse (young sheep).

The price is to be negociated.

We can also offer other brands of sheeps, much more econmical. If you wish, you tell me your price idea and we can inform you about the animal that we can offer at your reference price.

Please visit our site to see some photos of our sheeps, and also other cattle and products that we can offer. The site is: ( you should look in Stock)

Thank you very much for your attention
Best regards
Natacha Guimaraes
Product Manager
Skype: natacha116 (Portugal, Lisbon)
www,jvnonline,com

EMPLOYMENT IN SOUTH AFRICA / SOUTH AFRICA EMPLOYMENT GUIDE

South Africa Info — Tue Mar 13, 2007 11:30 am

Author: South Africa Info

Posted: Tue Mar 13, 2007 11:30 am

EMPLOYMENT IN SOUTH AFRICA

GENERAL

In addition to Affirmative Action (AA) policies which give preference to people of colour, those with disabilities and to females, foreigners, unless displaying extraordinary skill or experience may be passed over in favour of local employees. South Africa, like any other country, has an obligation to its people first and foremost and so limited opportunities are available.

South Africa has an exceptionally high unemployment rate (over 40%) and a massive pool of unskilled labourers. Demand for skilled workers is high, though. You will, of course, need a valid work permit in order to find legal employment in the country. As is the case in other countries, the web and local newspapers are as good as any place to start your job search.

A rosy future is forecast but right now opportunities are mainly for professionals and entrepreneurs.

South Africa has the most advanced economy in Africa - its GDP is nearly four times that of Egypt, its nearest competitor on the continent. But there is high unemployment and only 14 per cent of South Africans enjoy a standard of living equivalent to that of Western Europeans or North Americans.

Until 1914, South Africa's economy was based mostly on mining and agriculture. It has an abundant supply of resources and well developed financial, legal, communications, energy and transportation sectors.

South Africa's climate and energy attract many would-be residents but it is beset with social problems - high unemployment being the worst and the main cause of others.

EMPLOYMENT MARKET

Economists offer an upbeat forecast in the years ahead - a stable political and economic environment. The government is addressing the issues of privatisation and deregulation, in an attempt to make the country more investor-friendly in the long term. This outlook bodes well for business and for job seekers.

The most promising economic areas in South Africa are the IT sectors, telecommunications, security, healthcare, e-commerce, beauty products, pollution management technologies, tourism, infrastructure and finance. South Africa will continue to be an attractive choice for exports, foreign investment and joint ventures.

While unemployment is high, a telling indicator of job opportunities for skilled foreign workers is the country's graduate unemployment rate, which is just 2.9 per cent, a rate conventionally regarded as full employment.

Information technology

South Africa's IT sector is growing rapidly and is considered one of the top ten emerging markets for computer companies. Nearly three-quarters of IT workers are under the age of 35.

IT professionals enjoy higher-than-average salaries and lower barriers to entry. Currently, there is a shortage. Computer-engineering degree programmes and other courses are springing up nationwide.

The Information Technology Association S.A. and the Post and Telecom Association of South Africa are two of the country's IT-related professional associations. Periodicals covering the industry, such as Computing SA, are useful to foreigners seeking IT jobs.

Engineering

South Africa's engineering industry is large, sophisticated and versatile. Because of the country's relatively advanced industrial sector, there is a steady demand for engineers in the steel and iron industries, the motor industry, mining and quarrying and construction. There are opportunities for geological, industrial, metallurgical, and mineral processing engineers.

Many companies employ students and universities (called technikons) while they're still in school, allowing them to receive both theoretical and practical training. Engineers in some specialties must pass a certificate of competency before becoming full-fledged professionals.

The Engineering Council of South Africa (ECSA) evaluates the academic qualifications of foreigners who wish to become registered to work as professional engineers in South Africa. As a member of the Engineers Mobility Forum (EMF), South Africa recognises the standards of other member countries when evaluating applicants.

Other organisations for engineers in South Africa include the Constructional Engineering Association and the Steel and Engineering Industries Federation of South Africa.

Accounting and finance

South Africa has a sophisticated financial structure with a large and active stock exchange that ranks 18th in the world in terms of total market capitalisation. According to one study, the financial workers most in demand are chartered accountants, insurance professionals, consultants, and auditors.

There are several professional accountancy associations.

Sales and marketing

Research analysts and marketing managers are in particularly high demand. Foreigners may find it useful to obtain licensing or certification through professional bodies.

The Institute for Market Management, for instance, has begun to certify professionals with Chartered Marketer status, which is intended to distinguish those marketing professionals who are exemplary models of the changing course of business in South Africa.

General business

While there is no formal category for general business or business consulting jobs, the types and number of consulting careers are increasing. Again, licensing and certification can be useful.

Professional associations for business and consulting professionals include the International Guild of Certified Management Consultants and the Small Business Information Network, which promotes and provides support to small, medium, and micro-businesses in order to contribute to equitable economic growth in South Africa.

There are many useful business periodicals in South Africa, including many published in English. The Business Times provides a wide range of information on business-related topics.

PROFESSIOANL RESOURCES

If you're a professional hoping to find a job in South Africa your starting point could be one of the country's many professional organisations.

Many South African towns have their own chambers of commerce whose websites are worth exploring and several books about business and work in South Africa have been published recently.

DOING BUSINESS IN SOUTH AFRICA / SOUTH AFRICA BUSINESS GUIDE

South Africa Info — Tue Mar 13, 2007 11:29 am

Author: South Africa Info

Posted: Tue Mar 13, 2007 11:29 am

DOING BUSINESS IN SOUTH AFRICA

STARTING A BUSINESS

STANDARDIZED COMPANY
Legal Form: Private Limited Liability Company
Minimum Capital Requirement: 1
City: Johannesburg

Registration Requirements:

Procedure 1. Prepare and certify documentation

Time to complete: 7 days

Cost to complete: ZAR 50

Comment: It is not possible to lodge the required documents oneself unless one is the subscriber to the Memorandum of Association. In terms of section 63(3) of the Companies Act a subscriber to the Memorandum of Association or a duly authorized attorney (or his/her clerk) may lodge such formation documentation. One is compelled to utilize an agent attend thereto, which will result in further expenses. The average lodgment fee is R500 but varies from agent to agent.

The attorney or a similar agent needs to verify the client's particulars according to the Financial Intelligence Centre Act of 2001. Cost can vary, depending on whether one uses the standard Table B Articles of Association contained in Schedule 1 of the Companies Act or a lawyer's fully drafted document.

Procedure 2. Pay all duties.

Time to complete: 1 day

Cost to complete: no charge

Comment: Payment of the required duties can be made at Cipro's cash office, by credit card or by direct deposit into Cipro's bank account

Procedure 3. Reserve a company name with the Registrar of Companies

Time to complete: 3 days (electronic lodgments - The lodgment of a name reservation application in person at Cipro's office may take longer.)

Cost to complete: ZAR 50

Comment: The use of revenue stamps has been discontinued. The office of Cipro has a cash office where payments can be made and the receipt is then attached to the documentation. Payment can also be made by credit card or by direct deposit into Cipro's bank account; copies of such receipts must be attached to the documentation. The fee for the name reservation can be paid at Cipro's cash office, by credit card or by direct deposit into Cipro's bank account.

Once a name has been approved by Cipro the name reservation is valid for two months in which period the company should be incorporated. One can, however, apply for the extension of a name reservation for a further period of two months by lodging a further name reservation application and paying a further R50 for such application. The lodgment of a name reservation in person at Cipro's office may take longer.

Procedure 4. Lodges formation documentation with Cipro in Pretoria, Gauteng Province, South Africa for registration

Time to complete: 7 days

Cost to complete: ZAR 60 (registration fee) + ZAR 350 (stamp tax) + 0.5% of capital + ZAR 60 (certificate to commence business) + ZAR 50

Comment: Bank into Cipro's bank account. A certificate to commence business is required by law (s172 of the Companies Act) before a company can legally trade or raise finance. The form CM46 - certificate to commence business is submitted together with the formation documentation. This document cannot be "applied for" once the name has been reserved, the Registrar will only incorporate the company if all the required documentation is submitted simultaneously.

The following documents must be submitted:

- A copy of Cipro's letter advising that the name has been approved and reserved by them.

- One original set of the certificate of incorporation, Memorandum and Articles of Association together with the necessary signatories pages. The memorandum of association must reflect the stamp duty payable which is calculated on the authorized share capital of the company, being a flat rate of R350 plus R5 for every R1,000 or part thereof or, in the event of the company having shares of no par value, R5 for each 1,000 shares or part thereof. The minimum stamp duty payable on a formation of a company is R415.

Copies of the Memorandum and Articles of Association certified by a notary public as true copies in terms of s 63(1) of the Companies Act. These documents must be bound, together with the certificate of incorporation (the certificate of incorporation being the first page, the notary's certification page next and then the complete set of Memorandum and Articles of Association). Each page of the Memorandum and Articles of Association must reflect the notary's seal.

Original powers of attorney, one from each subscriber.
Form CM22 (notice of registered office and postal address) in duplicate.
Form CM29 (information pertaining to a company secretary).
Form CM31 (consent to the appointment of the auditor) in duplicate. Every South African company must appoint a South African auditor.

-Forms CM27 - (consent to the appointment, one for each director).

Form CM46 (the certificate to commence business) together with R60 in revenue stamps.

The procedure takes from 4 to 10 days.

The Registrar will attend to the recording of the registration by allocating a registration number to the company and will release the notarially certified set of the Memorandum and Articles of Association, certificate of incorporation and certificate to commence business, one form CM22 and CM31 and the tear-off portion of form CM29 to the applicant/agent.

Procedure 5. Open a bank account

Time to complete: 1 day

Cost to complete: no charge

Comment: Certified copies of the company's formation documentation must be furnished to the bank.

Procedure 6. Register with the office of the local receiver of revenue (SARS) for income tax, VAT, and employee withholding tax (PAYE and SITE).

Time to complete: 12 days

Cost to complete: no charge

Comment: Business with annual taxable income of more than R300,000 needs to register for VAT.

The application for the registration of VAT is done on a VAT101 form. This takes approximately 10 working days. Cipro and the South African Revenue Service are linked electronically. Once a company is incorporated the relevant South African Revenue Service office is advised and an income tax number is allocated to such entity. A form EMP1 is required for PAYE (employee tax) and SITE (inclusive of employee tax), only payable if an employee earns more than R60 000.00 per annum. No separate registration required for SITE. With regards to VAT applications, SARS now assesses the viability of the business as part of the registration process
The company must appoint a public officer in terms of section 101 of the Income Tax Act and must advise the relevant SARS office of the full name, residential and postal address of such person. This person must be resident in South Africa.

Procedure 7*. Register with the Department of Labour for Unemployment Insurance.

Time to complete: 7 days (simultaneous with procedure 6)

Cost to complete: no charge

Comment: Application forms for UIF is UI8 and UI19. Registration forms can be obtained from SARS's website, the address is www.sars.gov.za. The UI8 is the application which must be submitted by the company. Once the application is approved a reference number will be issued, whereafter the UI19, which discloses the number of employees and their salaries, must be submitted.

Procedure 8*. Register with the relevant Metropolitan Council for local revenue/salary levy.

Time to complete: 14 days (simultaneous with procedure 6)

Cost to complete: no charge

Comment: The certificate for registration is received in 2-3 weeks. This is called "regional council levies" and is payable to the relevant Metropolitan Council (where the company's registered office is situated). The application forms are RSC4 and RSC6. Once the council has reviewed the application the certificate for registration is posted to the company's registered postal address or registered office.

Procedure 9*. Register with The Compensation Fund of South Africa according to the Compensation for Occupational Injuries and Diseases Act.

Time to complete: 1 day (trivial), (simultaneous with procedure 6)

Cost to complete: no charge

Comment: Registration forms can be obtained from the Department of Labour's website, the address is www.labour.gov.za. Businesses do not have to wait for the approval of registration to start operation.

The service levy/registration fee is calculated according to a rating of the company's type of business. Payment can be made by cheque or direct deposit into the Department's bank account. The relevant form is a WAS2 and written notification will be sent once the completed application has been examined.

Note: Procedures sometimes take place simultaneously. Instances of this are marked with an asterisk (*).

FORMS OF BUSINESS ORGANISATION

A business may be conducted by individuals, partnerships, trusts, close corporations, South African companies, or branches of foreign companies.

A close corporation is governed by the Close Corporations Act. It may have only individuals as members and, thus, is not usually a suitable vehicle for foreign investors.

A South African company may be public (name ends in "Limited") or private (name ends in "(Proprietary) Limited"). Both private and public companies are governed by the Companies Act. There is no minimum equity capital requirement for companies.

The private company is the most common vehicle for operating a business in South Africa. It may have only one member and director. There need not be any South African resident directors.

A subsidiary of a foreign company is regarded as a South African company. The legal liability of the parent company is limited to the amount of capital committed (together with any guarantees provided).

A branch of a foreign company is regarded as an "external company" if it establishes a place of business or owns immovable property in South Africa, and must register as such.

The legal liabilities of a branch are not limited to the extent of its South African assets.

Both a South African company and a branch operation are subject to the provisions of the Companies Act.

A branch is obliged to lodge a certified copy of its Memorandum and Articles of Association (or other instrument defining its constitution) with the Registrar of Companies, as well as a sworn translation into English where appropriate.

Two primary requirements for a branch are:

1. an annual audit, and

2. financial statements must be lodged with the Registrar of Companies. (Financial statements must also be lodged for a company as a whole. Exemptions, renewable every two years, may be obtained in certain circumstances).

Locally registered private companies are also required to be audited but are not required to lodge their annual financial statements with the Registrar of Companies. In certain instances it may be more beneficial to register a South African company, for an enhanced image and easier access to credit facilities. It may also be an advantage when obtaining Government contracts.

TAXATION

Corporate tax

Main rate: 29%

Resident companies are taxed on their worldwide income; non-resident companies are taxed only on South African-source income. A company is resident if it is incorporated, established or formed in South Africa or its place of effective management is in South Africa. The tax rate is 29%, and the secondary tax on companies (STC) is imposed at 12.5% on distributions. Dividends paid within a group of companies (70% holding) are exempt from STC, subject to election. The tax rate for foreign companies operating through a branch or agency in South Africa is 34%. Special rules apply to gold mining and insurance companies.

Individual tax

Progressive rates to 40%

Resident individuals are taxed on their worldwide income; non-residents are taxed only on their South African-source income. An individual is resident if present in South Africa for more than 91 days in the relevant tax year and the five preceding years, and for more than 915 days in the aggregate in the preceding five tax years. A person is also resident if “ordinarily resident”, ie if the person’s settled home or main residence is in South Africa. Income tax is charged at progressive rates to 40%. Dividends received by a resident individual from a South African company are generally exempt.

Capital gains

Gains are taxed in part as income

Capital gains tax is charged at the normal corporate or individual tax rates on 50% of the gain realised by a company and 25% of the gain realised by an individual. Non-residents are only liable for capital gains tax on the disposal of immovable property in South Africa, the disposal of shares in a real property company or the disposal of assets by a permanent establishment in South Africa. Individuals are exempt from gains on the sale of their primary residence, up to a value of ZAR 1.5m.

Indirect tax

VAT standard rate: 14%

Value-added tax (VAT) applies to most transactions at the 14% standard rate. Zero-rating applies to exports, international transport, some basic foodstuffs, some farming goods and certain fuels. Exemptions include some financial services, residential rents, domestic passenger transport and educational services.

Registration is compulsory for businesses with a turnover above ZAR 300,000.

Tax administration and compliance

Tax year: Corporations: accounting year; Individuals: year to February 28th

Companies make provisional tax payments on a half-yearly basis, the first payment within the first six months of the tax year and the second by the end of the tax year. Companies must submit a tax return within 60 days of the end of their financial year. Employment income of individuals is taxed by withholding; other income is subject to provisional tax payments. Individuals who are required to complete a tax return must submit the return by a date notified to them by the tax commissioner. Final tax payments of companies and individuals are collected by assessment after examination of the tax return.

Additional tax information

Withholding taxes: Dividends and Interest 0%, Royalties 12%. Rates may be reduced by tax treaty.

Tax treaties: South Africa has concluded more than 55 tax treaties.

Dividends: Domestic dividends are not taxable. Foreign dividends are taxable with a participation exemption, where shareholding criteria are met.

Revenue protection: There is transfer-pricing, thin-capitalisation and offshore subsidiary (CFC) legislation.

Groups: There is no provision for group treatment.

Incentives: Preferential corporate tax rate for small business corporations; research and development, employee housing depreciation, urban development and infrastructural development allowances; and public private partnerships allowance.

Other taxes: Capital gains tax, Donations tax, Estate duty, Excise duty, Import duties, Marketable securities tax, Stamp duty, Tax on retirement funds, Transfer duty.

Financial Advisors services, Offshore Fund - Know More

admin — Mon Feb 05, 2007 4:42 am

Author: admin

Posted: Mon Feb 05, 2007 4:42 am

Financial Advisors services, Offshore Fund - Know More

Dear members & guests

Due to the continuous marketing approach of our expatriate community by multiple financial planners services company, Allo' Expat has decided to provided you with some usefull imformation on the Expat Offshore Banking issue. Hope you'll invest wisely..... in the future

Financial Advisors - who are they?

Q1 - How do I get the best offshore financial advice?

The best offshore financial advice is probably given by Independent Financial Advisors. Independent financial advisors (or IFA's, as they are sometimes called) advise their clients on savings, investments and pensions. They may also provide Savings Plans for offshore investing to their clients.

When counselling a client, the best offshore financial advisors should complete the following steps:

* Step 1 - collect detailed information about a client's financial circumstances and requirements ? be they for retirement planning, retirement income, expat investment, or another purpose.

* Step 2 - check all the offshore tax havens for the best offshore plans.

* Step 3 - provide impartial advice as to which plan(s) best meet their client's needs (in the form of a written report).

* Step 4 - arrange for a client to buy the chosen offshore plan(s) on the best terms available.

You may want to complete your own research to ensure you know the right questions to ask your advisor.

When all these stages are completed, you can be confident you have received the best offshore financial advice.

Q2 - What is a Certified Financial Advisor?

Financial advisors may need a license to practice, issued by the Financial Services Regulator in their Country. Only these advisors may be called 'Certified Financial Advisors'.

It may be a condition that prospective certified financial advisors show their Regulator that they are:

* competent to advise

* impartial in their advice

* independent of Providers

* covered by professional indemnity insurance.

So it is important to check that your financial advisor is listed under:

* Certified Financial Advisors, licensed to advise in the Country where you live and

* Independent Financial Advisors - advising on a wide range of offshore plans from a full list of providers.

Now you should feel confident you are receiving the best offshore financial advice.

Q3 - How are offshore financial advisors paid?

Independent financial advisors (IFA's) earn their living from commissions they receive from plan providers. This is their income for the offshore financial advice they give.

The commission that advisors (IFAs) receive from offshore financial advice cases may range from hundreds to thousands of dollars.

Good offshore financial advisors should not be influenced by the amount of commission they receive.

Some clients prefer to pay fees to their financial advisors for advice to ensure impartiality. When this occurs offshore financial advisors refund commission received from a plan provider either in cash or as an increased allocation of contributions invested.

Q4 -How do I find a list of Independent Financial Advisors (IFAs)?

Search the web! Try searching using the search words independent financial advisors or certified financial advisors PLUS the name of the Country in which you live.

Personal recommendations are always helpful - ask your friends if they would recommend their offshore financial advisors. Always check that a recommended advisor is both certified and independent.

Offshore Investing - What do that mean

Q1 - What is Offshore Investing or Offshore Investment?

When we talk about Offshore investing plan opportunities it is like the savings plans available in many countries, except these plans:

* Are registered in tax havens and are regulated by their Financial Services Authorities.

* Can be used for investing by non-residents of the tax havens.

* Are sometimes more tax efficient than or have other advantages over domestic savings plans.

Q2 - Why would expatriates choose offshore investing?

Expatriate investment in the savings plans catalogued here and offering offshore investing opprotunities might be appropriate when:

* No local or Home Country tax free regular savings plans are available.

* No local or Home Country tax free lump sum investment plans are available.

* An expatriate is planning to retire to a third country.

If you fit any of these categories of expatriates you should investigate the offshore plans researched by Offshore Boffin and consult your Financial Advisor.

Q3 - Are there other people who might benefit from Offshore Invesment?

Yes. People who are not living abroad might find offshore investment attractive in the following circumstances:

* They have more cash available for savings than can be invested tax free in their resident countries' investment plans (perhaps because the amount they can invest each year is capped).

* They may live in countries which do not have domestic tax free savings plans.

* They live in countries which are not suitable long-term investment environments for political or economic reasons.

* They wish to limit the effects of inheritance tac on their estates.

Q4 - Is there safe offshore investing?

The answer is that All investors should remember that the value of ALL their investments can go down as well as up!

Safe offshore investing is more likely by choosing plans:

* From politically stable tax havens - the quality of tax havens varies.

* From well-regulated tax havens - the tax havens whose savings plans are catalogued here all regulate their financial services companies to avoid 'fly-by-night' companies.

* From reputable investment management and life assurance companies - whilst past performance is not always a guide to the future, the companies whose savings plans are listed here are all well-known names.

* Investing in 'mutual' or 'collective' funds. these funds are based on a simple idea. If a large number of investors pool their savings in - for example - an equity fund, the larger fund can be invested in shares in many companies, spreading each individual's risk.

For expat investment - and others - to be successful the best offshore investment opportunities must be found. For that you'll need a good Financial Advisors.

FX Currency Trading / FX Forex Trading Online - Know More

admin — Mon Feb 05, 2007 4:40 am

Author: admin

Posted: Mon Feb 05, 2007 4:40 am

Forex Trading / FX Trading

Foreign Exchange
This short introduction explains the basics of trading Forex online, a brief explanation of the markets and the major benefits of trading Forex online. There are also two scenarios describing the implications of trading in a bear as well as bull market to better acquaint you with some of the risks and opportunities in the largest and most liquid market in the world.

As an additional aid for those who are new to Forex, there is also a glossary at the bottom of this text which explains some of the terms used in connection with currency trading.

Overview
Foreign exchange , forex or just Forex are all terms used to describe the trading of the world's many currencies. The forex market is the largest market in the world, with trades amounting to more than $1.5 trillion every day. This is more than one hundred times the daily trading on the NYSE (New York Stock Exchange) . Most forex trading is speculative , with only a few percent of market activity representing governments' and companies' fundamental currency conversion needs.

Unlike trading on the stock market, the forex market is not carried out 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.

Trading Forex
A currency trade is the simultaneous buying of one currency and selling of another one. The currency combination used in the trade is called a cross (for example, the Euro/US Dollar, or the GB Pound/Japanese Yen.). The most commonly traded currencies are the so-called "majors" - EURUSD, USDJPY, USDCHF and GBPUSD.

The most important forex market is the spot market as it has the largest volume. The market is called the spot market because trades are settled "immediately" or on the spot. In practice this means within two banking days.

Trading on Margin
Trading on margin means that you can buy and sell assets that represent more value than the capital in your account. Forex trading is usually done with relatively little margin since currency exchange rate fluctuations tend to be less than one or two percent on any given day. To take an example, a margin of 2.0% means you can trade up to $500,000 even though you only have $10,000 in your account. In terms of leverage this corresponds to 50:1, because 50 times $10,000 is $500,000, or put another way, $10,000 is 2.0% of $500.000. Using this much leverage gives you the possibility to make profits very quickly, but there is also a greater risk of incurring large losses and even being completely wiped out. Therefore, it is inadvisable to maximise your leveraging as the risks can be very high. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the section entitled "Trading Conditions" found in the top right-hand corner of the Account Summary.

Why trade Forex?

24 hour trading
One of the major advantages of trading forex is the opportunity to trade 24 hours a day from Sunday evening (20:00 GMT) to Friday evening (22:00 GMT). This gives you a unique opportunity to react instantly to breaking news that is affecting the markets.
Superior liquidity
The forex market is so liquid that there are always buyers and sellers to trade with. The liquidity of this market, especially that of the major currencies, helps ensure price stability and low spreads . The liquidity comes mainly from large and smaller banks that provide liquidity to investors, companies, institutions and other currency market players.
No commissions
The fact that forex is often traded without commissions makes it very attractive as an investment opportunity for investors who want to deal on a frequent basis. Trading the "majors" is also cheaper than trading other crosss because of the high level of liquidity. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the section entitled "Trading Conditions" found in the top right-hand corner of the Account Summary.
50:1 Leverage
With a minimum account of USD 10,000, for example, you can trade up to USD 500,000. The USD 10,000 is posted on margin as a guarantee for the future performance of your position.
Profit potential in falling markets
Since the market is constantly moving, there are always trading opportunities, whether a currency is strengthening or weakening in relation to another currency. When you trade currencies, they literally work against each other. If the EURUSD declines, for example, it is because the U.S. dollar gets stronger against the Euro and vice versa. So, if you think the EURUSD will decline (that is, that the Euro will weaken versus the dollar), you would sell EUR now and then later you buy Euro back at a lower price and take your profits. The opposite trading scenario would occur if the EURUSD appreciates .

Important Forex Trading Terms

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 5 pips under normal market conditions. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the section entitled "Trading Conditions" found in the top right-hand corner of the Account Summary.
Pips
A pip is the smallest unit by which a cross price quote changes. When trading forex you will often hear that there is a 5-pip spread when you trade the majors. This spread is revealed when you compare the bid and the ask price, for example EURUSD is quoted at a bid price of 0.9875 and an ask price of 0.9880. The difference is USD 0.0005, which is equal to 5 "pips". On a contract or position, the value of a pip can easily be calculated. You know that the EURUSD is quoted with four decimals, so all you have to do is the cancel-out the four zeros on the amount you trade and you will have one pip. Thus, on a EURUSD 100,000 contract, one pip is USD 10. On a USDJPY 100,000 contract, one pip is equal to 1000 yen, because USDJPY is quoted with only two decimals.

Trading Scenario - Trading Rising Prices
If you believe that the Euro will strengthen against the dollar you'll want to buy Euro now and sell it back later at a higher price.

You buy Euro	We quote EURUSD at Bid 0.9875 and Ask 0.9880, which means that you can sell 1 Euro for 0.9875 USD or buy 1 Euro for 0.9880 USD. In this example you buy Euro 100,000, at the quote price of 0.9880 (ask price) per Euro.
The market turns	Later the market turns in favour of the Euro and the EURUSD is now quoted at Bid 0.9894 and Ask 0.9899.
Now you want to sell your Euro and get the profit	You sell Euro at a Bid price of 0.9894.
The profit is calculated as follows:	Sell price-buy price x size of trade (0.9894 minus 0.9880) multiplied by 100.000 = $140 Profit (Note that the profit or loss is always expressed in the secondary currency )

Trading Scenario - Trading Falling Prices
If, on the other hand, you believe that the Euro will weaken against the dollar, you'll want to sell EURUSD.

You sell Euro	We quote EURUSD at a Bid price of 0.9875 and Ask price of 0.9880 and you decide to sellEuro 100,000 at a Bid price of 0.9875.
The market moves in your favour	The Euro weakens against the dollar and the EURUSD is now quoted at bid 0.9744 and ask 0.9749.
Now you buy back your Euro	You buy EUR at an ask price of 0.9749.
Your Profit/loss is then	Sell price-buy price x size of trade (0.9875 minus 0.9749) multiplied by 100.000 = $ 1260 Profit

Remember that trading EUR 100,000 as we have done in our examples, does not mean that you have to put up Euro 100,000 yourself. It means that you have to deposit 2.0% of Euro 100,000, which is Euro 2,000 on margin as a guarantee for the future performance of your position.

Further Reading
To see how you can trade the forex market and benefit from our toolbox of information and live quotes, please proceed to our Forex Quick Start found under the Trading menu on the toolbar, under Forex.

Glossary

Appreciation	Anincrease in the value of a currency.
Ask	Theprice at which you can buy. Traders also speak of an ask price,the price requested. This usually indicates the lowest price aseller will accept.
Basecurrency	Thecurrency that the investor buys or sells (i.e. EUR in EURUSD).
Bear	Someonewho believes prices are heading down. A bear market is one inwhich there is a sustained fall in prices and which does not looklike it will recover quickly.
Bid	Theprice at which you can sell. Traders also speak of a bid price,the price offered. This usually indicates the top price apurchaser will pay.
Bid/Ask	TheBid rate is the rate at which you sell. The Ask (or offer) rate isthe rate at which you can buy.
Bull	Someonewho is optimistic about the market. A bull market is characterisedby enthusiastic and sustained buying.
cross	Whentrading currencies, the investor buys one currency againstanother. These two currencies form the cross: for example, EURUSD.
Crossrate	Anexchange rate that is calculated from two other exchange rates.
Depreciation/decline	Afall in the value of a currency.
Exchangerate	Whatone currency is worth in terms of another, for example the $Amight be worth 58 US cents or 70 yen. Currencies traded freely onforeign-exchange markets have a spot rate (applying to tradessettled 'spot', ie, two working days hence) and a forward rate.Countries can determine their exchange rates in a variety of ways:a floating exchange rate system where the currency finds its ownlevel in the market; a crawling or flexible peg system which is acombination of an officially fixed rate and frequent smalladjustments which in theory work against a build-up of speculationabout a revaluation or devaluation; a fixed exchange-rate systemwhere the value of the currency is set by the government and/orthe central bank.
EURUSD	Meansthat you trade EUR against dollars. If you buy Euro you pay indollars and if you sell Euro you receive dollars.
FX,Forex, Foreign Exchange	Allnames for the transaction of one currency for another, e.g. youbuy �100.00 with $150.25 or sell $150.25 for �100.00.
Interbank	Short-term(often overnight) borrowing and lending between banks, as distinctfrom banks' business with their corporate clients or otherfinancial institutions.
Interestrate differential	Theyield spread between two otherwise comparable debt instrumentsdenominated in different currencies.
Leverage(gearing)	Inthis case leverage means that the investor only funds part of theamount traded.
Long	Tobuy.
Longposition	Aposition that increases its value if market prices increase.
Liquid(-ity)	Thecapacity to be converted easily and with minimum loss into cash.Ultra-short-dated treasury notes are an example of a liquidinvestment. A liquid market is one in which there is enoughactivity to satisfy both buyers and sellers.
Margin	Theinitial amount or deposit required when entering into a position.Margin is a guarantee for future performance.
NYSE	Acomputerised system providing brokers with the prices of sharesand securities traded on the New York stock exchange and over thecounter. The quotes are published in real-time.
Openposition	Aposition in a currency that has not yet been offset. For example,if you have bought 100,000 USDJPY, you have an open position inUSDJPY until you offset it by selling 100,000 USDJPY.
"Overthe counter"	Whentrading takes place directly between two parties, rather than onan exchange.
Pips	Apip is the smallest unit by which a cross price quote changes. Soif EURUSD bid is now quoted at 0.9767 and it moves up 2 pips, itwill now be quoted at 0.9769.
Position	Money-market,futures, foreign-exchange and sharemarket traders talk of 'takinga position' which simply means buying or selling one currencycross. 'Position' can also refer to a trader'scash/securities/currencies balance, whether he or she is short ofcash, has money to lend, is overbought or oversold in a currency,etc.
Risk	Tryingto control outcomes to a known or predictable range of gains orlosses. Risk management involves a set of steps which begin with asound understanding of one's business and the exposures or risksthat have to be covered to protect the value of that business.Then an assessment should be made of the types of variables thatcan affect the business and how best to protect against unwelcomeoutcomes. Consideration must also be given to the preferred riskprofile - whether one is risk- averse or fairly aggressive inapproach. This also involves deciding which instruments to use tomanage risk, and whether a natural hedge exists that can be used.Once undertaken, a risk-management strategy should be continuallyassessed for effectiveness and cost.
Secondarycurrency (variable currency or counter currency)	Thecurrency that the investor trades the base currency against (i.e.USD in EURUSD).
Shortposition	Aposition that benefits from a decline in market prices.
Short	Tosell.
Speculative	Buyingand selling in the hope of making a profit, rather than doing sofor some fundamental business-related need.
Spot	ASpot rate is the current market price of an asset.
Spotmarket	Thepart of the market calling for spot settlement of transactions.The precise meaning of 'spot' will depend on local custom for acommodity, security or currency. In the UK, US and Australianforeign-exchange markets, 'spot' means delivery two working dayshence.
Spread	Thedifference between the bid and the ask rate.

Today'sForex News
ForbesBreaking News	BloombergNews
YahooCurrency News	NikkeiNews
GoogleBusiness News	KyodoNews
ReutersFinancial News

Live Updates
Live Forex Quotes and Charts

Forex Market Information

Federal Reserve Banks' "All About the Foreign Exchange Markets in the United States"

Forex Related Sites

Economic Calendars

Central Banks & Regulatory Agencies

News