How Do I Begin Trading In Forex Market?

What is FOREX or FOREX Market? Part I

The Foreign Exchange market (also referred to as the Forex or FX market) is the biggest market for financial transactions in the world and has more than $1.5 trillion being traded each day.

This is more that all US markets for equity or Treasury markets together!

Contrary to other financial markets that are centralized (i.e. stock exchanges) and the world-wide Forex market is not based at a central point of operation. This is the world’s largest electronic system of financial institutions, banks and traders on their own, all involved in the trading and buying of currencies from national banks.

Forex market open 24/7

Another important aspect that is unique to this Forex market is the fact that it is open 24/7 that is, in line with the time of opening and closing of financial centers in nations across the globe beginning every day in Sydney followed by Tokyo, London and New York.

Any time, in any place there are buyers and sellers and sellers, making it the Forex market to be the world’s most liquid market around the globe.Traditionally accessibility to the Forex market was accessible only to banks and other financial institutions with large scales. Thanks to advances in technology over time but this Forex market has become accessible to everyone from banks to money managers to individuals who trade retail accounts.

The best time to participate in this exciting and world-wide market was never more perfect than right now. Create an account now and be an active participant in the biggest market on earth.

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Forex Market VS Stocks Market

It is the Forex Market is very different from trading in futures on the currency market. It is also a lot more convenient than trading commodities or stocks.

If you’re aware of whether or not you are aware, you have a part to play within this Forex market. Simply because there is money inside your pockets is a reason to invest in currencies, especially the US Dollar. When you hold dollars in the US, you’ve chosen not to hold currencies of any other nation.

The purchase of bonds, stocks or other investment options, along with the money that you have deposited into your bank account, are the kind of investments that depend heavily on the its value designated currencies “the US Dollar.

Exchange rates

Due to the fluctuation of the worth of the US Dollar and the resulting fluctuations in exchange rates your investments could alter in value, which can affect your financial health overall. This is why it is not a surprise that a lot of investors have benefited from the fluctuation of Exchange Rates and the fluctuations in this Foreign Exchange market as a method to boost their capital.

For example, suppose you had $1000 in your bank account and you purchased Euros at a time when the exchange rate was 1.50 Euros per dollar. You’d then have 1500 euros. If Euros’ value in comparison to the US dollar increased , then you’d trade (exchange) euros to dollars and end up with more dollars than you began with.

Example:

You may observe the following:

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The last time EUR/USD traded is 1.5000 is

One Euro equals $1.50 US dollars.

First, the currency (in this instance it is EURO) EURO) is known as the “base currency”, and another one (/USD) is referred to as the counter or quote currency. (/USD) is referred to as the quote or counter currency.

The FOREX plays an important role in the global economy and there is always a massive demand for exchange of currency. The international trade market is increasing because of the advancement in technology and communication.

So long as there’s international trade and communication, there will be an FOREX market. The market for FX must be in place so that a country like Germany is able to sell its goods in the United States and be able to exchange Euros to exchange US Dollar.

Risk Warning:

Risks associated with currency trading

Margined trading in currency is a risky type of investment that is only appropriate for those and institutions that can handle the risk of losses. A broker account permits you to trade foreign currencies on a dependent basis (up to around 400 times the amount of your account equity).

The accounts which is trading at the highest leverage could be lost when the position(s) which are within the account experience just a single percent change in value. Because of the risk of losing the entire capital, speculation in the market for foreign exchange must be done only with funds for risk which, if they are lost and not affecting the financial security of the investor.

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Practice on the Forex Market

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