What is FOREX foreign exchange trading? 20143

This article will explain some of the basic principals of FOREX Foreign Exchange Trading. This article will explain why FORES is a growing industry.

Foreign Exchange Market, or Forex as it is commonly called, is an international exchange market to buy and sell different currencies from around the world. An investor has the ability to buy and sell these currencies in order to create gains from small movements in the value of one currency over another. The Foreign Exchange Market, or Forex, is open Monday at 0:00 GMT to Friday at 10:00 GMT. Forex traders do not have to adhere to the New York Stock Exchange's (NASDAQ) general trading hours.

Many investors are attracted to Forex trading by its versatility. Forex investors are also attracted by the liquidity of the Foreign Exchange Market, where trades can range between 1 and 1.5 trillion dollars per day. These massive amounts of trades make it extremely difficult for any one trader to affect the market.

Foreign Exchange Trading is simply the purchase and sales of currency based on the strength of the currency and the fluctuation in the value of that currency. For example, if one were to invest $1,000 against the British pound at 1.49989 with a 1% margin and anticipate the exchange rate to climb. If that occurs and you close the exchange rate at 1.5050 you would earn roughly $400. Forex is giving you a 40% return on your investment.

Forex allows for huge profits to be made in a relatively short period of time. The stock exchange is very different in that positions are generally maintained over a longer period of time. Although there are day traders, Forex traders have much shorter hold times on positions. Similar to the stock market marginal accounts can be obtained in the Foreign Exchange Market as well.

Forex margin accounts are a great way to engage Forex traders as they enable them to trade large amounts of currency without needing to deposit a lot. In many circumstances one can fund a marginal account with .05% the necessary funds. If you want to put it another way, $500 will allow for a position of $100,000. To trade Forex profitably and effectively, you need to have a method. There are two methods used in determining what Foreign Exchange trades one should make. Fundamental Forex analysis and technical Forex Analysis are the two methods.

Technical Forex Analysis is the most commonly used practice and uses the assumption that the changes that occur in the Foreign Exchange Market happened for a reason and are accurate. It is believed that if the currency has been moving towards a high, it will continue to move towards that high. The opposite can also be true. The technical Forex view does not try to make long term predictions about the market but instead simply tries to take advantage of what has already been seen in the past.

The fundamental Forex method considers all factors of the country where the currency is traded. The fundamental Forex method takes into consideration factors such as the country's prime interest rate, war, poverty, and the economy. If there is a sharp rise in the useful link prime interest rate a Forex trader may take a position based on that information.

Forex trading online on the Foreign Exchange Market can be extremely profitable. One can learn to trade by creating an online Forex Account and begin by using a learning account without real funds. This will help you to understand the Forex trading process and how currencies are affected by different things that are happening on a global scale.