Yes, You Too Can Own A Piece Of The Forex Trading Pie!
Yes, You Too Can Own a Piece of the Forex Trading Pie!
Today, anyone around the globe can be an investor. But what are you going to invest in? There are stocks, bonds, mutual funds, options, futures, precious metals - the list goes on and on. To add to the confusion, the New York Stock Exchange trades over 4,000 stocks and futures - the Dow Jones another 2,800. And if you factor in all the foreign markets, we're looking at well over 100,000 companies and agencies traded. When you're on your own, all these potential trades can make the stock market quite confusing and truly a bit overwhelming.
The Foreign Currency Exchange (FX or Forex) market exists wherever one currency is traded for another. It is by far the largest and most liquid financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The average daily trade in the global forex and related markets currently is over USD $3 trillion, and evidence suggests that the market is still expanding, even in today's economic turmoil.
FX is simple to understand once it is realized that a currency is effectively a commodity whose value can change against other currencies, as well as other assets, such as gold and oil.
In an FX transaction, one currency is sold in exchange for another one. The rate expresses the relative value between the two currencies. Currencies are normally identified by a three-digit code. For example, EUR = the euro, USD = the US dollar, CHF = the Swiss franc and so on. A EUR/USD rate of 1.5000 means that 1 is worth $1.5.
This code, EUR/USD, is referred to as a currency pair. The rate can also be inverted. So a EUR/USD rate of 1.5000 is the same as a USD/EUR rate of 0.6666. In other words, $1 is worth 0.6666. The market convention is that most currencies tend to be quoted against the dollar, but there are notable exceptions, such as with the EUR/USD already mentioned, GBP/USD (UK sterling) and AUD/USD (the Australian dollar). This is not as confusing as it may sound.
FX is a global market that never sleeps. It is active almost 24 hours a day, 7 days a week. Most activity takes place between the time the New Zealand market opens on Monday, which is Sunday evening in Europe, until the US market closes on Friday evening.
So, let's take a glimpse into this financial trade. Among the most highly in-demand activities, currency trading is placed on top in the business world.
The skills and knowledge required to engage in currency trading are vast. Common sense, coupled with good mathematical skills is a must for currency trading.
The money market is usually the first place any investor explores when desiring to generate huge profits. Besides currency trading, a financial investor can also look at day trading, commodity trading and futures trading.
Until the advent of Internet-based trading, currency trading was a niche belonging only to multinational corporations, hedge funds and impressive financial institutions. Today, it is no longer only accessible to a privileged few, but has become the very existence of many retail currency traders, and even individual day traders.
Being quite different from stocks and bonds, currency trading does not have a regulatory exchange. This means that traders are free to buy and sell as much currency in any denomination, as long as they can spare to spend the capital.
Traders cooperate and compete simultaneously, so it's all self-regulated by all those who are involved. While such an arrangement might seem rather ad hoc and loose, it all works out fine, because the sky is the limit in this specialty.
Currency trading is not only the most liquid, but also the most fickle market in the world. Just as the name implies, day trading is all about buying and selling financial instruments within a single day. This doesn't mean that it's absolutely limited to day-time, but the general hours followed in day trading are tied to the open and close of the day's financial market.
FX trading has the potential to be one of the most lucrative forms of investment of our time. It offers 24 hour trading conditions coupled with almost instant execution via the Internet, a high leverage for bigger returns, and many different platforms to be able to write your own algorithm for an automated trading system to achieve steady returns like the bigger firms. With many brokers attaining high status quickly from the FX trading boom sweeping the investing world, it would seem that there isn't much of a slowdown in sight for the world's most liquid and most traded market.
If you liked this article and would like more information concerning the foreign currency market and forex trading, visit our website at www.mickyoung.com/forex-trading today!
by: Mick Young
How to Get the Best Forex Money Manager Program Forex Megadroid Torrent Real Time Forex Charts Simple Forex Trading Strategy - A Trading Methodology Anyone Can Use For Huge Gains! What Is The Secret Of Forex Trading Success? Forex Expert Advisor - A Robot With A Stunning Record Of Real Time Verified Gains Forex Trading Facts - Understand The Facts Enclosed Or You Will Lose Your Money Forex Geyser Review Ask our experts your Currency Trading related questions here... Como Operar Rentablemente El Mercado Forex Great Things About A Managed Forex Trading Account What Currency Trading Is And What You Need To Do It Successfully Day Trading Forex Trading Signals and the S&P 500