Your Guide To Successful Forex Trading


Your Guide To Successful Forex Trading

Your Guide To Successful Forex Trading
If you were wondering; forex trading is​ nothing more than direct access trading of​ different types of​ foreign currencies .​
In the​ past, foreign exchange trading was mostly limited to​ large banks and​ institutional traders however; recent technological advancements have made it​ so that small traders can also take advantage of​ the​ many benefits of​ forex trading just by using the​ various online trading platforms to​ trade .​
The currencies of​ the​ world are on a​ floating exchange rate, and​ they are always traded in​ pairs Euro/Dollar, Dollar/Yen, etc .​
About 85 percent of​ all daily transactions involve trading of​ the​ major currencies .​
Four major currency pairs are usually used for​ investment purposes .​
They are: Euro against US dollar, US dollar against Japanese yen, British pound against US dollar, and​ US dollar against Swiss franc .​
Right now I​ will show you how they look in​ the​ trading market: EUR/USD, USD/JPY, GBP/USD, and​ USD/CHF .​
As a​ note you should know that no dividends are paid on currencies .​
If you think one currency will appreciate against another, you may exchange that second currency for​ the​ first one and​ be able to​ stay in​ it .​
In case everything goes as​ you plan it, eventually you may be able to​ make the​ opposite deal in​ that you may exchange this first currency back for​ that other and​ then collect profits from it .​
Transactions on the​ FOREX market are performed by dealers at​ major banks or​ FOREX brokerage companies .​
FOREX is​ a​ necessary part of​ the​ world wide market, so when you are sleeping in​ the​ comfort of​ your bed, the​ dealers in​ Europe are trading currencies with their Japanese counterparts .​
Therefore, it​ is​ reasonable for​ you to​ believe that the​ FOREX market is​ active 24 hours a​ day and​ dealers at​ major institutions are working 24/7 in​ three different shifts .​
Clients may place take-profit and​ stop-loss orders with brokers for​ overnight execution .​
Price movements on the​ FOREX market are very smooth and​ without the​ gaps that you face almost every morning on the​ stock market .​
The daily turnover on the​ FOREX market is​ somewhere around $1.2 trillion, so a​ new investor can enter and​ exit positions without any problems .​
The fact is​ that the​ FOREX market never stops, even on September 11, 2001 you could still get your hands on two-side quotes on currencies .​
The currency market is​ the​ largest and​ oldest financial market in​ the​ world .​
It is​ also called the​ foreign exchange market, FX market for​ short .​
It is​ the​ biggest and​ most liquid market in​ the​ world, and​ it​ is​ traded mostly through the​ 24 hour-a-day inter-bank currency market .​
When you compare them, you will see that the​ currency futures market is​ only one per cent as​ big .​
Unlike the​ futures and​ stock markets, trading currencies is​ not centered on an​ exchange .​
Trading moves from major banking centers of​ the​ U.S .​
to​ Australia and​ New Zealand, to​ the​ Far East, to​ Europe and​ finally back to​ the​ U.S .​
it​ is​ truly a​ full circle trading game .​
In the​ past, the​ forex inter-bank market was not available to​ small speculators because of​ the​ large minimum transaction sizes and​ strict financial requirements .​
Banks, major currency dealers and​ sometimes even very large speculator were the​ principal dealers .​
Only they were able to​ take advantage of​ the​ currency market's fantastic liquidity and​ strong trending nature of​ many of​ the​ world's primary currency exchange rates .​
Today, foreign exchange market brokers are able to​ break down the​ larger sized inter-bank units, and​ offer small traders like you and​ me the​ opportunity to​ buy or​ sell any number of​ these smaller units .​
These brokers give any size trader, including individual speculators or​ smaller companies, the​ option to​ trade at​ the​ same rates and​ price movements as​ the​ big players who once dominated the​ market.






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