Forex Market Basics
One of the most popular trading venues for investors is the Foreign Exchange or Forex market. This market works from the principle that currencies have an exchange rate that varies from day to day - even hour by hour. Buying currencies and working the trades (whether a short-sell or a buy-and hold position) can turn a nice profit. The forex markets are worth roughly three trillion dollars of action each day.
First of all, the main thing about the forex market is accessibility. Anyone and everyone can trade the forex market at anytime. You don't have to go through a high priced broker to place your trades. You can simply download a trading platform directly to your computer and make whatever trades you want from the comfort of home.
Forex markets happen the world over, not in some fixed location; you're trading online (like the major brokerage houses do). An order gets put in and gets consolidated at the broker's desk with all of their other clients. From there, it goes on to the market, and that means you can run from the start of business on Monday in London to the close of business on Friday in Hong Kong, 24 hours a day, for almost six days a week including the time zone adjustments.
Forex trading is all about changes in the price of a currency pair; these are denominated in ten thousandths of a unit of currency, and shifts of even one or two ten thousandths can result in large profits. Getting that small of a currency swing to turn into a profit requires leverage, where you're borrowing money to make the size of your bets larger. Leverage has its risks - just ask anyone who lost money in the last nine months on the financial markets. Used wisely, it's a sensible tool. Used poorly, it's like shaving with a chainsaw.
Forex trading can be lucrative, if you're willing to be wired in to be a constantly shifting day trader. You're playing the swings in volatility, and with leverage, even shifts of a thousandth of a unit of currency can create (or lose) large sums of money quickly. With forex trading, it's very unlikely that your investment will become utterly worthless - it's still currency at the end of the day.
Like any investment, there is an element of risk. Especially when playing with large amounts of leveraged capital, you run the risk of big losses. Be careful, start out slow, and used strict money management techniques while you figure out if this is a job you like.
Forex has a lot of strategies beyond day trading. One of the saner ones, for people who don't want to be glued to the Internet for 100 hours a week, is position trading. There are longer term trends in forex trading and this is a lot less stressful (and time intensive) than trying to run the volatile day by day swings.
Overall, the power of the forex market is what makes it so appealing. Many have compared this to the gold rush in that it is a way for a common man to become immensely wealthy. Just make sure that you know what you're doing, or you'll lose all of your money in a flash. Be prepared to learn a lot and keep your lessons in mind when you trade. With this type of power, you can provide for you and your family for years to come. - 23208
First of all, the main thing about the forex market is accessibility. Anyone and everyone can trade the forex market at anytime. You don't have to go through a high priced broker to place your trades. You can simply download a trading platform directly to your computer and make whatever trades you want from the comfort of home.
Forex markets happen the world over, not in some fixed location; you're trading online (like the major brokerage houses do). An order gets put in and gets consolidated at the broker's desk with all of their other clients. From there, it goes on to the market, and that means you can run from the start of business on Monday in London to the close of business on Friday in Hong Kong, 24 hours a day, for almost six days a week including the time zone adjustments.
Forex trading is all about changes in the price of a currency pair; these are denominated in ten thousandths of a unit of currency, and shifts of even one or two ten thousandths can result in large profits. Getting that small of a currency swing to turn into a profit requires leverage, where you're borrowing money to make the size of your bets larger. Leverage has its risks - just ask anyone who lost money in the last nine months on the financial markets. Used wisely, it's a sensible tool. Used poorly, it's like shaving with a chainsaw.
Forex trading can be lucrative, if you're willing to be wired in to be a constantly shifting day trader. You're playing the swings in volatility, and with leverage, even shifts of a thousandth of a unit of currency can create (or lose) large sums of money quickly. With forex trading, it's very unlikely that your investment will become utterly worthless - it's still currency at the end of the day.
Like any investment, there is an element of risk. Especially when playing with large amounts of leveraged capital, you run the risk of big losses. Be careful, start out slow, and used strict money management techniques while you figure out if this is a job you like.
Forex has a lot of strategies beyond day trading. One of the saner ones, for people who don't want to be glued to the Internet for 100 hours a week, is position trading. There are longer term trends in forex trading and this is a lot less stressful (and time intensive) than trying to run the volatile day by day swings.
Overall, the power of the forex market is what makes it so appealing. Many have compared this to the gold rush in that it is a way for a common man to become immensely wealthy. Just make sure that you know what you're doing, or you'll lose all of your money in a flash. Be prepared to learn a lot and keep your lessons in mind when you trade. With this type of power, you can provide for you and your family for years to come. - 23208
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posted by X - Men @ 4:37 AM
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