Currency forecasting refers to the ability to predict the long-term value, movement and price of a currency. We have seen that there are, at least, two approaches to predicting price changes. The first is a href="http://forextrading.about.com/od/fundamentalanalysis/a/fundamental_ro.htm" jquery1242417447937="36">fundamental analysis. The second is technical analysis.

Currency forecasting refers to the ability to predict the long-term value, movement and price of a currency. We have seen that there are, at least, two approaches to predicting price changes. The first is fundamental analysis. The second is technical analysis. However, technical analysis is more useful to develop trading strategies that predict future price movements. 

“In Principle an option is a financial instrument that give the holder the right, but not the obligation, to sell (put) or buy (call) another finical instrument at a set price and expiration date (Shapiro, 190).” In this case the financial instrument being spoken of is currency. “Futures are standardized contracts that trade on organized futures markets for specific delivery dates only (Shapiro, 524).” When trading currency we can see two major differences in general futures contracts and options contracts.

Futures contracts are available to buyers and sellers from around the world who trade in organized futures market. Contract sizes and maturities are standardized and are traded only for specific delivery dates. Once a trade is confirmed, the exchange’s clearing house backed by its members capital legally stands behind both the buyer and the seller, thus decr

      The Chicago Mercantile Exchange (CME) was first opened in 1898 as the Chicago Butter and Egg Board and adopted its current name in 1919. The exchange became public in 2002 and since its inception, it has been a leading center for risk management products, such as options, futures, and other derivatives. The CME uses two systems of trading. The first system is the original mode of trading, called the “open outcry” system.