"How To" Start Trading The Forex Market?
Martin Maier
The Foreign Exchange market (also referred to as the Forex or FX market) is the largest financial market in the world, with over $1.5 trillion changing hands every day.
That is larger than all US equity and Treasury markets combined!
Unlike other financial markets that operate at a centralized location (i.e. stock exchange), the worldwide Forex market has no central location. It is a global electronic network of banks, financial institutions and individual traders, all involved in the buying and selling of national currencies. Another major feature of the Forex market is that it operates 24 hours a day, corresponding to the opening and closing of financial centers in countries all across the world, starting each day in Sydney, then Tokyo, London and New York. At any time, in any location, there are buyers and sellers, making the Forex market the most liquid market in the world.
Traditionally, access to the Forex market has been made available only to banks and other large financial institutions. With advances in technology over the years, however, the Forex market is now available to everybody, from banks to money managers to individual traders trading retail accounts. The time to get involved in this exciting, global market has never been better than now. Open an account and become an active player in the largest market on the planet.
The Forex Market is very different than trading currencies on the futures market, and a lot easier, than trading stocks or commodities.
Whether you are aware of it or not, you already play a role in the Forex market. The simple fact that you have money in your pocket makes you an investor in currency, particularly in the US Dollar. By holding US Dollars, you have elected not to hold the currencies of other nations. Your purchases of stocks, bonds or other investments, along with money deposited in your bank account, represent investments that rely heavily on the integrity of the value of their denominated currency šthe US Dollar. Due to the changing value of the US Dollar and the resulting fluctuations in exchange rates, your investments may change in value, affecting your overall financial status. With this in mind, it should be no surprise that many investors have taken advantage of the fluctuation in Exchange Rates, using the volatility of the Foreign Exchange market as a way to increase their capital.
Example: suppose you had $1000 and bought Euros when the exchange rate was 1.50 Euros to the dollar. You would then have 1500 Euros. If the value of Euros against the US dollar increased then you would sell (exchange) your Euros for dollars and have more dollars than you started with.
Example:
You might see the following:
EUR/USD last trade 1.5000 means One Euro is worth $1.50 US dollars.
The first currency (in this example, the EURO) is referred to as the base currency and the second (/USD) as the counter or quote currency.
The FOREX plays a vital role in the world economy and there will always be a tremendous need for the exchange of currencies. International trade increases as technology and communication increases. As long as there is international trade, there will be a FOREX market. The FX market has to exist so a country like Germany can sell products in the United States and be able to receive Euros in exchange for US Dollar.
RISK WARNING:
Risks of currency trading
Margined currency trading is an extremely risky form of investment and is only suitable for individuals and institutions capable of handling the potential losses it entails. An account with an broker allows you to trade foreign currencies on a highly leveraged basis (up to about 400 times your account equity).The funds in an account that is trading at maximum leverage may be completely lost if the position(s) held in the account experiences even a one percent swing in value. Given the possibility of losing one's entire investment, speculation in the foreign exchange market should only be conducted with risk capital funds that, if lost, will not significantly affect the investors financial well-being.
About the Author
Veteran Trader Martin Maier is the Founder of http://www.fenixcapitalmanagement.com He is the developer of various futures and commodities trading programs and his systems have been ranked and rated by various large American Investment Profile Rating Companies such as STAR and MAR.
The latest information and news on Forex:
WORLD FOREX: Dollar Gains Ground After Strong US Retail Sales - Wall Street J...
Reuters
WORLD FOREX: Dollar Gains Ground After Strong US Retail Sales
Wall Street Journal
"The data was dollar positive," said Jacob Oubina, a currency strategist at Forex.com in Bedminster, NJ "It's going to raise [US's] first quarter GDP up ...
Forex: Euro and pound extend 3-day...
Forex: US Retail Sales and Consumer Sentiment - InvestorGuide
BBC News
Forex: US Retail Sales and Consumer Sentiment
InvestorGuide
Two US figures will be in the limelight today: retail sales and consumer sentiment. In addition, we have employment figures from Canada and other events. ...
Forex Trading Prepares for US Retail Sales DataForexyard (blog)
all 801 news a...
Forex: Euro plods in range - NASDAQ
FXstreet.com The Forex Market
Forex: Euro plods in range
NASDAQ
FXstreet.com (London) - Euro has slipped into a sleepy sideways channel as players wind-down for the weekend. EUR/USD is plodding along in a tight 10 pip ...
Daily GVI Forex Forex ViewForex Hound
Forex: USD/JPY eases below 91.00 after consum...
FOREX-Dollar little changed vs majors in volatile trade - Reuters
FOREX-Dollar little changed vs majors in volatile trade
Reuters
... and there's concern that there could be problems in Portugal, Spain, Ireland," said Michael Malpede, market analyst at Easy Forex in Chicago. ...
and more »
Friday Currency Wrap-Up: The US Economy Is Still Trending Higher - Forexrazor
Friday Currency Wrap-Up: The US Economy Is Still Trending Higher
Forexrazor
High-Risk Warning Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work ...
and more »
foreign exchange - Google News
Pound foreign exchange rates: Friday 12 March - Economy News
Reuters
Pound foreign exchange rates: Friday 12 March
Economy News
Pound Euro exchange rate is lower while Pound Dollar exchange rate is higher in morning trade in London. The GBPEUR os lower by 0.025% with 1 GBP = 1.1015 ...
WORLD FOREX: Dollar Weakens Slightly On Euro After Trade DataWall Street Journ...
? Foreign Exchange Intervention at Issue in Japan - Seeking Alpha (blog)
RTE.ie
? Foreign Exchange Intervention at Issue in Japan
Seeking Alpha (blog)
Deflation has been persistent in Japan for two decades due to very low unemployment rate in Japan for the very low GDP growth rate. ...
Pressure mounts on BOJ for policy loosening next weekReuters
BOJ Shirakawa: Easy Credit Pol...
CHINA NPC: SAFE: Views Differ Within China On Yuan Exchange Rate - Wall Stree...
Telegraph.co.uk
CHINA NPC: SAFE: Views Differ Within China On Yuan Exchange Rate
Wall Street Journal
Yi Gang, the director of the State Administration of Foreign Exchange and a vice governor of the People's Bank of China, reiterated China will continue to ...
Gold Has Less Luster in ChinaWall Street...
Foreign Exchange - Market News International
Foreign Exchange
Market News International
Speculative accounts built a new record net euro short position and trimmed their net yen long position as per March 9, according to data released late ...
and more »
China's Golden Plans and Silver's Long- and Short-Term Trends - Before It's News
Forex Flash
China's Golden Plans and Silver's Long- and Short-Term Trends
Before It's News
This Tuesday China's chief foreign exchange regulator, Yi Gang, told reporters that China is not interested in increasing its gold reserves. ...
Gold: 'Not A Bad Asset', IndeedGold Seek
The Ins ...