Learn Forex Trading

Learn Forex Trading

The world has many markets: stock markets, Forex Trading Markets, currencies and funds. They are the most renowned markets for traders with around the globe. Most traders understand the basics of investing in shares, or in other financial markets trading shares, so I will occasionally use examples from that market.

If you do not know a lot about currency trading, allow me to introduce it to you. It is what I trade and I believe that it is one of the best markets to trade because of its efficiency. The transaction costs to execute a trade are minimal and most brokers provide you with the tools and data you need to make your trading decisions, they usually provide them for free. The market is open 24 hours a day which allows you to design your trading hours around your daily commitments. It is very volatile, which is great for those people who are looking for day-trading opportunities.

The foreign exchange market is the market in which currencies are bought and sold against one another. People may loosely refer to this market under different labels, including foreign exchange market, forex market, fx market or the currency market.

The foreign exchange market is one of the largest financial markets in the world, with daily trading volumes in excess of $1.5 trillion US dollars. All transactions involving international trade and investment must go through this market because these transactions involve the exchange of currencies. This is a very good investing market due to its large number of sellers and buyers selling similar products. The barriers for you to participate to this market are virtually low and the incentives can be phenomenal when you learn a good forex investment strategy.

Some of the Forex Trading market is based on an over-the-counter (OTC) market. This means that sellers and buyers can meet face to face to exchange currencies. Nowadays the majority of forex  transactions are performed electronically usually by brokers which specialise in trading currencies.

Learn Forex Trading

The most important Forex dealing centres are currently in: London , with about thirty five per cent of the market, New York , with twenty five per cent, Tokyo , with around 15%, Frankfurt, Zurich, Singapore and Hong Kong , with about 8% each, followed by Sydney and Paris and Sydney with 3-4% each. Due to their global locations, forex traders can perform transactions across the daily 24 hours cycle except for weekends, as this is when foreign exchange markets are closed.

The main players within the forex market are: businesses, individual traders, commercial banks, central banks, and investment banks . Potential traders, tourists and immigrants, are required to   exchange currencies when travelling to enable them buying local goods and services. They do not have the power to set any prices. They just sell and buy according to the most prevailing exchange rate. This makes up a large volume of daily transactions being traded in the market.

Businesses which are involved in exporting and importing goods and services that import and export goods and services are also required to deal with  currencies exchange in order to make or receive  payments for goods they may have purchased or services bought or services they may have sold.

Investors need currencies to buy and sell investments such as bonds, bank deposits shares,real estate or annuities.

Large commercial and investment banks are the biggest players and usually “set the prices ‘. Due to the large volumes of daily transactions they have the power and ability to sell, buy and bid for offers that are declared via their own forex dealers. Commercial banks deal with individual customers, and with the other international banks, therefore profiting by utilizing the bid-and-offer spread. The bid price is usually the exchange rate that the buyer is willing to buy and the offer price is the exchange rate at which the seller is willing to sell. The difference is called the bid-offer spread. Big banks can  make profits by speculating about the possibility of whether the exchange rate will rise or fall in a short period of time.

Central banks are some of the main participants in the foreign exchange market and their duty is to be the main decision and financial policy makers for as their governments. They usually trade currencies to facilitate government monetary policies therefor assisting to stabilise  any of the fluctuations of the value of their national currency.

Finally a word of encouragement: think about learning how to drive a car when you learn skills for foreign exchange investments. When you start driving a car you are an anxious driver, but when your driving skills improve you gain more confidence and become a better driver. The same goes when you Learn Forex Trading skills. You will become a better forex trader

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