Foreign exchange, commonly referred to simply as Forex, is a global, decentralized financial market where currencies are traded. The foreign exchange market is biggest and most liquid financial market in the world, participated not only by large financial institutions, corporations, banks, and extremely wealthy individuals, but also by average investors.
What makes Forex different from other markets is that it does not have a central clearing house, and that it operates for 24 hours a day except weekends. Consequently, even those who are already employed can earn additional income from doing Forex trading on the side since by the time they are home, there will still be traders from other time zones who wish to purchase or sell currencies. Those who trade in the foreign exchange market can make use of software or trading platforms on their laptops or smartphones so they can conveniently manage their portfolio, easily monitor economic reports and price actions, and make trades any time and in any place.
Purchasing currencies at a lower price and re-selling them for a higher price is the primary way of earning a profit in Forex trading. To increase the likelihood of attaining this objective, those who trade in the currency market make use of fundamental and technical analysis methods.
Fundamentalists look at economical and political reports in order to determine the true value of a currency, while technical adherents look at historic price actions to predict future price actions. Understanding these concepts is paramount to anyone who wishes to become successful in this venture.
More than a decade ago, trading was done in yards, which amounted to billions of a particular currency each trade. Nowadays, the market has already made this venture to people who do not have very large trading capital through the introduction of standard, mini and micro lots. Also, the leverage you can use in the foreign exchange market is the highest among financial markets, allowing you to hold a relatively large position for a small investment.
The Forex market is one of, if not the most volatile among financial markets as exchange rates are affected by a host of social, economic, political factors, and in most cases, even by natural catastrophes. One of the risk-magnifiers associated to Forex trading is the use of leverage which many say is a double-edged sword as it can magnify both your earnings and your losses. Just the same, with sound judgment, and by adequately managing these risks, losses can be avoided and returns increased.
What makes Forex different from other markets is that it does not have a central clearing house, and that it operates for 24 hours a day except weekends. Consequently, even those who are already employed can earn additional income from doing Forex trading on the side since by the time they are home, there will still be traders from other time zones who wish to purchase or sell currencies. Those who trade in the foreign exchange market can make use of software or trading platforms on their laptops or smartphones so they can conveniently manage their portfolio, easily monitor economic reports and price actions, and make trades any time and in any place.
Purchasing currencies at a lower price and re-selling them for a higher price is the primary way of earning a profit in Forex trading. To increase the likelihood of attaining this objective, those who trade in the currency market make use of fundamental and technical analysis methods.
Fundamentalists look at economical and political reports in order to determine the true value of a currency, while technical adherents look at historic price actions to predict future price actions. Understanding these concepts is paramount to anyone who wishes to become successful in this venture.
More than a decade ago, trading was done in yards, which amounted to billions of a particular currency each trade. Nowadays, the market has already made this venture to people who do not have very large trading capital through the introduction of standard, mini and micro lots. Also, the leverage you can use in the foreign exchange market is the highest among financial markets, allowing you to hold a relatively large position for a small investment.
The Forex market is one of, if not the most volatile among financial markets as exchange rates are affected by a host of social, economic, political factors, and in most cases, even by natural catastrophes. One of the risk-magnifiers associated to Forex trading is the use of leverage which many say is a double-edged sword as it can magnify both your earnings and your losses. Just the same, with sound judgment, and by adequately managing these risks, losses can be avoided and returns increased.
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The Forex market is the biggest and most liquid financial market in the world. Today, Forex trading is no longer limited to those with deep pockets. Click here forex trading to find out more.
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