subject: Intro to foreign exchange [print this page] Intro to foreign exchange Intro to foreign exchange
The foreign exchange market is more complicated than the stock market. This is a fact. Anyone who wishes to dabble in foreign exchange markets should first familiarise themselves with the concepts and terminology involved and read up every bit of information they can find on this hot topic. You will quickly discover that everyone who is anyone advises you to get the services of a trustworthy stockbroker that you can build a relationship with. In looking for a stockbroker you must remember that generally you get what you pay for so if you try to haggle as far as his fee is concerned with a person who is going to have control over your portfolio don't be surprised if he haggles on your profits ! So, be careful. A good stockbroker is an asset in itself in that he/she will be able to guide you in the right direction and can give you sound advice.
Once you have the concepts of forex under the knee you can start looking at the markets and ask yourself a number of questions. What are the different options ? Which stocks are available and which outperform which historically ? When do you buy ? When do you sell ? Will you make a profit ? or a loss ? Are you willing to gamble with your whole portfolio ? What will you do if the market crashes ? There are many factors to consider and as you become more familiar with foreign exchange market concepts you will be able to think of more questions and also have more answers.
Clearly, if one has a nervous disposition then you are in the wrong place ! You will suffer a nervous breakdown unless if you are on some powerful medicine, but that again may cloud your judgement.
Once you are familiar with the concepts and terminology you should start watching the forex trends and indicators. You must remember that forex differs from stock markets in that forex trades for 120 hours non stop i.e. 24 hours a day for five days, whereas other markets only trade on a daily basis and closes every night to reopen again the following morning. So, when you go to sleep at your night time it is still day somewhere else in the world and trading continues - meaning that you could be making money while you are soundly asleep ! Remember that there are many websites on the internet that teaches you about forex and that has developed tools to help you along. Some even offer you a training account where you can dabble theoretically until you feel secure enough to srat with real currency. CLicke here to see my page of favourite links.
The foreign exchange markets are very volatile resulting in changes taking place daily but even more so hourly. This volatility can be beneficial in that you can turn large profits in a short period of time, and unfortunately the opposite also holds true !
