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Monday, December 28, 2009

Do You Want To Make Money? What Do You Know About FOREX Trading Platform?

By John Eather

What is FOREX? - Foreign Exchange Market, also known as 'FOREX' or 'FX' is the largest financial market in the world with a daily turnover of US$3. 2 trillion. FOREX trading platform allows us to buy one currency and sell another. Currencies trade in pairs, like the US Dollar / Japanese Yen (USD/JPY).

The simultaneous buying of one currency and selling of another is determined by two factors. First of all, it's about companies making transactions in foreign countries, generating approximately 5% of the daily turnover. Secondly, we're talking the speculation for profit, which represents 95%.

How exactly does FOREX work? FOREX transactions are based on major currencies such as Australian Dollar, Canadian Dollar, US Dollar, British Pound, Japanese Yen and Euro. The world's largest financial market operates 24 hours a day. The greatest advantage is that traders are able to respond in no time to currency fluctuations.

FOREX market is considered an over-the-counter market, because transactions are conducted either by telephone or by electronic networks, having no central exchange.

It's not difficult to read a foreign exchange quote if you keep in mind two things: the first currency listed is the base currency and the value of the base currency is always 1. U. S. Dollar (USD) is normally the essence of the FOREX market and currently it represents the base currency for quotes. For example, a quote of USD / JPY 120. 01 means that 1USD = 120. 01 JPY.

FOREX trading platform uses a quote of 2 sides- the BID and the ASK. The BID represents the price at which traders can sell base currency, while the ASK refers to the price of buying base currency.

What matters the most is to be aware that every investment is risky. You can never be 100% sure about how exchange rates will move. Therefore, it's recommended to use stop-loss orders, which are specific instructions on how to exit your position if the price reaches a certain point. - 23208

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