subject: Enter the World of Currency Markets [print this page] Within the recent worldwide recession, the world monitory reserves and central banks had to put in place emergency actions. The disposable money had contracted and the career market worsened and who can forget the redundancies. People had started considering alternative means of gaining capital and hence Forex trading became an option.
But not many understand what Forex trading is; most people would have heard of Forex trading but don't know specifically what it is. Forex trading also foreign exchange or FX trading, is the buying and selling of foreign currency, but it goes far deeper than that. These currencies can be traded through a broker or a dealer and are submitted in pairs. For instance the Australian dollar can be paired with Chinese Yuan, and similarly US dollar and Australian Dollar can categorised simultaneously. The Forex market is huge and is growing at a very fast pace, the trading value of Forex is more than four trillion US dollars.
Money can be made in Forex trading by predicting which currency is going to strengthen in the pair. But this market is really volatile and you need to act very quickly. Forex trading is very dependent on the currency rate fluctuations. You can trade both spot and forward contracts to take advantage of both short and long term trades.
The fluctuations in the Forex prices are determined by various factors . Global economies and politics and worldwide interest fluctuations are some of the things that play a part. The traders in the Forex market include, central and commercial banks, hedge funds, large business house and individual traders.
Why Should I Start Trading Forex?
It is a global market that can be accessed from all parts of the planet, and can also be traded 24 hours per day. There are no restrictions on trading, if a trader believes that the currency would depreciate then he is free to sell, but if it's held for more than a day then you need to consider the carrying cost. This surely indicates that potential profit exists. The Forex trading market has an equal trading field for all and information is available on the net unlike equity trading where the traders and analysts have an upper hand in the trade. It also has extremely high liquidity andvolatilitywhich isfantasticfor any serious trader.
