FOREX
 

Google Adsense and Affiliate Marketing - a comparative glance

Affiliate Marketing is one of the simplest means to make money online. Affiliate marketing is basically an agreement between two websites - merchant website and affiliate website. The affiliate website agrees to let the merchant website advertise his products on his/ her website in lieu of a pre-determined pay out plan. The merchant website thus gets web-promotion. Further, the ads featured by affiliate websites comprise of link to the advertising merchant website, which act as valuable inbound links for the website. The inbound links outside the website are taken as positive votes by the search engines in their logical deductions to determine the rank of the website in SERPs (Search Engine Rank Pages). As a result, the merchant website has increased traffic and better reputation in the long run.In exchange, the merchant website pays a small commission to the affiliates in whatever method they mutually agree to. The popular methods of payment are pay per click method or pay per lead method or pay per sale method. While the affiliates prefer pay per click method for obvious reasons, merchant websites prefer pay per lead or pay per sale method. The pay per lead and pay per sale methods let the merchant pay only when a visitor actually registers and converts into a customer, respectively. However, irrespective of the method of payment employed, the affiliate marketing method proves to be way much cheaper and effortless for the merchant website than actually hiring an advertising firm for the task.As regards the affiliates, making money out of affiliate programs depends more on the number of visitors directed to the affiliate program than the method of payment adopted. The heavier the traffic generated for the merchant website, the better the returns.On the other hand, the Google AdSense program is a sort of an affiliate program wherein Google plays an intermediary between affiliates and advertiser websites. Google allows advertisers to sign up with the Google's AdSense program and submit their textual ads comprising of link to their respective websites. The advertiser website is also required to place a code on its website and leave the rest of the job entirely to Google. Thereafter, Google places the advertiser's ads across the web through its SERPs (Search Engine Ranking Pages), affiliate websites and registrants with Google AdSense. Google places these ads in tune with the context of the web content so as to ensure better prospects of being seen with interest and better probability to be clicked if seen. If an affiliate changes the web content, Google automatically modulates the ads to be relevant to the new subject of the content. Google charges the advertisers for this on a pay per click method, a part of which it shares with its affiliate responsible for the clicked ad.Associating with Google AdSense is a winsome situation for both the advertiser and the affiliate alike. While the advertiser gets extensive exposure through Google for a low cost in a hassle free manner as compared to hiring an advertising firm, the affiliate gets to render its web pages look more professional with contextual advertising by Google brand name, as well as, make some extra income in the process. Google AdSense also provides a tracking tool to the advertiser website so that the same can monitor the returns from each text ad placed by them at Google AdSense and thus improve upon the effectiveness of their ads.The contextual advertising outside the advertiser's website also helps the advertiser in terms of Search Engine Optimization. Search engines count these links embedded in the advertisements as positive votes for the website for ranking purposes.

What is an affiliate network?

More and more people everyday, around the world, are turning in their traditional sales and marketing plan for a cheaper and easier way of selling their company or organization. Affiliate marketing strategies are popping up all around the world, and since its fruition not so long ago the sales and marketing departments in most organizations saw a dramatic hike in their daily sales portfolio. This is something many business will lay testimony to and this is also something that has been tried and tested and is proven to work for anyone and any company that adopts the marketing strategy.Affiliate marketing, simply put, is a way to promote your online business. An affiliate will be rewarded for each subscriber, visitor, customer and sale that he or she refers to your web site. A commission is rewarded at a certain cost for each of the above, so it will be Pay per click, where you will pay an affiliate for every click he or she brings to your web site, pay per registration or better known as pay per lead, where you will pay an affiliate for every successful registration, pay per sale, where you will offer a commission on any sale made through your affiliate's efforts, and you can use a combination of any of the above. Many merchants love using affiliate marketing because it means that they do not need to pay a cent for marketing until there is real proof that a lead has been met, or a result is seen from his affiliates, this is called the "pay per performance" method.So now that you know a little more about affiliate marketing, let's get to the matter at hand - Affiliate network. Simply put, an affiliate network is an online media value added intermediately, which provides a service that includes distribution, campaign performance reporting and tracking and aggregation for affiliates and affiliate merchants. This network makes life easy for both the affiliate merchant and the affiliate. It provides things like tracking technology, payment processing, reporting tools, and a huge database of other affiliates to the affiliate merchant. For the affiliate, it provides things like easy to find affiliate merchants, payment aggregation and reporting tools.These networks are plentiful on the web and are free of costs to join, however they are very difficult to find. They are sometimes called providers of marketing solutions or the network to pay per performance, or advertising network to CPA, and even sometime they are called an online marketing performance based company. These companies or affiliate networks can provide CPA, PPL, PPS, and PPC from websites you promote. Most affiliate networks allow anyone to sign up, and others want your website to get at least a certain minimum amount of visitors on a daily basis. Others even let you see a certain amount of their data base before you sign up, those are the better ones, which know they have nothing to prove to anyone.

Speculation vs investment

It is very important that the individual wanting to trade foreign exchange be aware of the very marked difference between speculation and investment. Forex trading is by nature a speculative occupation. Foreign exchange markets are amongst the most volatile markets in the world. When traded on a margined basis they effectively become the most volatile in the world. Day trading in foreign exchange can be extremely profitable and high-risk profile traders can generate huge percentage returns even overnight. Day trading is however a mentally and psychologically challenging activity and is by no means meant for everyone. Day trading is essentially speculation and day traders essentially only do that: day trading. Most people who trade foreign exchange are not professional day traders however.Often the contractors of foreign exchange brokerage services are professionals in some capacity or other. These people do not day trade but take the occasional position from time to time. This is also speculation and should not be confused with making an investment.The conclusion here is that the nature of foreign exchange trading not lend itself as much to investment as it does to speculation and hedging (hedging may be performed in forward instruments). It is possible in a sense to make an investment in foreign exchange over a long-term period but this necessitates a large account value and low leveraging.currency prices. The middle band drawn in the forex chart represents the intermediate-term trend, and it is usually a simple moving average and it serves as the reference base for the upper and lower bands. The interval separating the upper and lower bands from the middle band is calculated by using the volatility of the market; typically the distance of the external bands from the middle band is a standard deviation of the same data that was used for the moving average.The default parameters used with these analysis technique is 20 periods for the average and two standard deviations for the gap between the bands. But these parameters may always be adjusted to suit the particular trading purposes of the forex trader using the indicator.By: A. PabloArticle Directory: http://www.articledashboard.comYou can learn an effective way to trade the Forex and become profitabBollinger Bands A Great Help In Forex Trading.Forex trading is a great activity that can earn you lots of money. If you know what to do and have invested the time needed to understand how the currency markets behave you will surely have a profitable experience with forex trading.The main problem any trader encounters when starting his trading career in the currency markets is how to predict what the market will do in a given future time period with good accuracy so that he can place the correct orders and pull a profit from a given market movement.There are a number of techniques and indicator that can give the trader a pretty good hint of what the market will do next. One of those techniques used to predict the Forex market behavior is that based on what is known as Bollinger Bands.Bollinger Bands are a technical trading tool used in the capital markets (including Forex) created by John Bollinger in the early 1980s. The way this indicator was formulated is based on the need for adaptive trading bands and the discovery that the volatility of the markets was a dynamic phenomena, not a static one as was widely believed at the time.Bollinger Bands consist of a set of three curves drawn onto a forex chart in relation to the currency prices. The middle band drawn in the forex chart represents the intermediate-term trend, and it is usually a simple moving average and it serves as the reference base for the upper and lower bands. The interval separating the upper and lower bands from the middle band is calculated by using the volatility of the market; typically the distance of the external bands from the middle band is a standard deviation of the same data that was used for the moving average.The default parameters used with these analysis technique is 20 periods for the average and two standard deviations for the gap between the bands. But these parameters may always be adjusted to suit the particular trading purposes of the forex trader using the indicator.By: A. PabloArticle Directory: http://www.articledashboard.comYou can learn an effective way to trade the Forex and become profitab

Market dynamics

The breadth, depth, and liquidity of the market are truly impressive. It has been estimated that the world's most active exchange rates like EURUSD and USDJPY can change up to 18,000 times during a single day.Somewhere on the planet, financial centers are open for business, and banks and other institutions are trading the dollar and other currencies, every hour of the day and night, aside from possible minor gaps on weekends. In financial centers around the world, business hours overlap; as some centers close, others open and begin to trade.The foreign exchange market follows the sun around the earth. Each business day arrives first in the Asia-Pacific financial centers; first Wellington, New Zealand, then Sydney, Australia, followed by Tokyo, Hong Kong, and Singapore. A few hours later, while markets remain active in those Asian centers, trading begins in Bahrain and elsewhere in the Middle East. Later still, when it is late in the business day in Tokyo, markets in Europe open for business. Subsequently, when it is early afternoon in Europe, trading in New York and other U.S. centers starts. Finally, completing the circle, when it is middle or late afternoon in the United States, the next day has arrived in the Asia-Pacific area, the first markets there have opened, and the process begins again.The graph underneath displays not only the currency trading time cycle but also the average 'depth' of trading at different times during the day in the various business hours.1. Spot rateA spot transaction is a straightforward (or outright) exchange of one currency for another. The spot rate is the current market price or 'cash' rate. Spot transactions do not require immediate settlement, or payment 'on the spot'. By convention, the settlement date, or value date, is the second business day after the deal date on which the transaction is made by the two parties.2. Bid & askIn the foreign exchange market (and essentially in all markets) there is a buying and selling price. It is important to perceive these prices as a reflection of market condition.A market maker is expected to quote simultaneously for his customers both a price at which he is willing to buy (the bid) and a price at which he is willing to sell (the ask) standard amounts of any currency for which he is making a market.ACM quotes very competitive spreads to customers, to site an example if a trader is interested in a transaction in EURUSD then he can trade on a bid/ask of say 0.9150 / 0.9153. This means that ACM is willing to buy from him a pre-determined amount at 0.9150 or inversely to sell to him at 0.9153.Generally speaking the difference between the bid and ask rates reflect the level of liquidity in a certain instrument. On a normal trading day, the major currency pairs EURUSD, USDJPY, USDCHF and GBPUSD are traded by a multitude of market participant every few seconds. High liquidity means that there is always a seller for your buy and a buyer for your sell at actual prices.3. Base currency and counter currencyEvery foreign exchange transaction involves two currencies. It is important to keep straight which is the base currency and which is the counter currency. The counter currency is the numerator and the base currency is the denominator. When the counter currency increases, the base currency strengthens and becomes more expensive. When the counter currency decreases, the base currency weakens and becomes cheaper. In telephone trading communications, the base currency is always stated first. For example, a quotation for USDJPY means the US dollar is the base and the yen is the counter currency. In the case of GBPUSD (usually called 'cable') the British pound is the base and the US dollar is the counter currency.4. Quotes in terms of base currencyTraders always think in terms of how much it costs to buy or sell the base currency. When a quote of 0.9150 / 53 is given that means that a trader can buy EUR against USD at 0.9153. If he is buying EURUSD for 1'000'000 at that rate he would have USD 915'300 in exchange for his million Euro. Of course traders are not actually interested in exchanging large amounts of different currency, their main focus is to buy at a low rate and sell at higher one.5. Basis points or 'pips'For most currencies, bid and offer quotes are carried down to the fourth decimal place. That represents one-hundredth of one percent, or 1/10,000th of the counter currency unit, usually called a 'pip'. However, for a few currency units that are relatively small in absolute value, such as the Japanese yen, quotes may be carried down to two decimal places and a 'pip' is 1/100th of the terms currency unit. In foreign exchange, a 'pip' is the smallest amount by which a price may fluctuate in that market.6. Euro cross & cross ratesEuro cross rates are currency pairs that involve the Euro currency versus another currency. Examples of Euro crosses are EURJPY, EURCHF and GBPEUR. Currency pairs that involve neither the Euro nor the US dollar are called cross rates. Examples of cross rates are GBPJPY and CHFJPY. Of course hundreds of cross rates exist involving exotic currency pairs but they are often plagued by low liquidity. Ever since the Euro the number of liquid cross rates have decreased and have been replaced (to a certain extent) by Euro crosses.

Main forex markets

Foreign exchange is traded essentially in two distinctive ways. Over an organized exchange and 'over the counter'. Exchange traded foreign exchange represents a very small portion of the total foreign exchange market the great majority of foreign exchange deals being traded between banks and other market participants 'over the counter'.1. Exchange traded currenciesIn the case of an organized exchange like the Chicago Mercantile exchange (CME) in the US, standardized currency contract sizes that represent a certain monetary value are traded in the International money market (IMM). A central clearing house organizes matching of transactions between counter-parties. There are various disadvantages to trading currency futures as outlined in the chapter Advantages of trading FX.2. Forex marketIn comparison the over the counter market is traded around the world by a multitude of participants and price quality, reputation and trading conditions determine who a participant wishes to trade with. It is probably the most competitive market in the world and brokers like ACM must insure they live up to the highest standards of service and be compliant with market standards and practices if they want to acquire new customers and retain their existing ones. In 1998 a survey under the auspices of the Bank for International Settlements (BIS), global turnover of reporting dealers was estimated at about USD 1.49 trillion per day. In comparison, currency futures turnover was estimated at USD 12 billion.Among the various financial centers around the world, the largest amount of foreign exchange trading takes place in the United Kingdom, even though that nation's currency, the British pound is less widely traded in the market than several others. As shown in the graph underneath, the United Kingdom accounts for about 32 percent of the global total; the United States ranks a distant second with about 18 percent, and Japan is third with 8 percent.

Market participants

In the last years, the foreign exchange market has expanded from one where banks would execute transactions between themselves to one in which many other kinds of financial institutions like brokers and market-makers participate including non-financial corporations, investment firms, pension funds and hedge funds.Its' focus has broadened from servicing importers and exporters to handling the vast amounts of overseas investment and other capital flows that currently take place. Lately foreign exchange day trading has become increasingly popular and various firms offer trading facilities to the small investor.Foreign exchange is an 'over the counter' (OTC) market, that means that there is no central exchange and clearing house where orders are matched. Geographic trading 'centers' exist around the world however and are: (in order of importance) London, New York, Tokyo, Singapore, Frankfurt, Geneva & Zurich, Paris and Hong Kong. Essentially foreign exchange deals are made between participants on the basis of trust and reputation to deliver on an agreement. In the case of banks trading with one another, they do so solely on that basis. In the retail market, customers demand a written legally accepted contract between themselves and their broker in exchange of a deposit of funds on which basis the customer may trade.Some market participants may be involved in the 'goods' market, conducting international transactions for the purchase or sale of merchandise. Some may be engaged in 'direct investment' in plant and equipment, or may be in the 'money market,' trading short-term debt instruments internationally. The various investors, hedgers, and speculators may be focused on any time period, from a few minutes to several years. But, whether official or private, and whether their motive be investing, hedging, speculating, arbitraging, paying for imports, or seeking to influence the rate, they are all part of the aggregate demand for and supply of the currencies involved, and they all play a role in determining the exchange rate at that moment.

Origins of foreign exchange

In order to gain a complete understanding of what foreign exchange market is, it is useful to examine the reasons that lead to its existence in the first place. Exhaustively detailing the historical events that shaped the foreign exchange market into what it is today is of no great importance to the fx trader and therefore we happily will omit lengthy explanations of historical events such as the Bretton Woods accord in favor of a more specific insight into the reasoning behind foreign exchange as a medium of exchange of goods and services.Originally our ancestors conducted trading of goods against other goods this system of bartering was of course quite inefficient and required lengthy negotiation and searching to be able to strike a deal. Eventually forms of metal like bronze, silver and gold came to be used in standardized sizes and later grades (purity) to facilitate the exchange of merchandise. The basis for these mediums of exchange was acceptance by the general public and practical variables like durability and storage. Eventually during the late middle ages, a variety of paper IOU started gaining popularity as an exchange medium.The obvious advantage of carrying around 'precious' paper versus carrying around bags of precious metal was slowly recognized through the ages. Eventually stable governments adopted paper currency and backed the value of the paper with gold reserves. This came to be known as the gold standard. The Bretton Woods accord in July 1944 fixed the dollar to 35 USD per ounce and other currencies to the dollar. In 1971, president Nixon suspended the convertibility to gold and let the US dollar 'float' against other currencies.Since then the foreign exchange market has developed into the largest market in the world with a total daily turnover of about 1.5 trillion USD. Traditionally an institutional (inter-bank) market, the popularity of online currency trading offered to the private individual is democratising foreign exchange and widening the retail market.