Currency Trading: How to Get Started in the Forex Markets Jacob Alexander Author
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Forex trading, more commonly known, in its abbreviated form of Forex, is an international market for the exchange or purpose of selling and buying currencies of different countries competing with each other in the monetary arena. The investors ability to sell and buy these different currencies does so in the hopes of making a small profit with each transaction.It is this that attracts investors and many become Forex traders. Trading in the this market is open from Monday 0:00 GMT and closes Friday 10:00 GMT and traders are not limited to NASDAQ or The New York Stock Exchange time frame. Actually the Foreign Exchange Market liquid and very attractive to investors who can make trades ranging up to two trillion dollars on a daily bases. Such huge amounts in the trading arena make it almost impossible for an individual trader to make a noticeable impact.Forex trading is the selling and buying of one country's currency for another country's. The strength or weakness of that currency, the ups and downs of it's value to that of another country. For example, an investment against the British pound, of three thousand American dollars ($3000.00) at 1.7999 and a margin of one percent predicting the rise of the exchange rate.If this happened you would close the rate of exchange at 1.8050 you would clear around one thousand two hundred dollars ($1200.00). This would afford you a forty percent profit on your investment. No wonder there are so many Forex investors, but it still takes planning and knowledge of the currency arena to be successful.Investors are provided with an a tremendous opportunity to trade and earn an enormous profit and losses if they try without a thoroughly thought out sensible short term trading plan. Foreign exchange trading is not like the stock exchange which holds positions for a much longer span of time. While Forex traders are numerous, they hold on to these positions for intervals of shorter durations of time.Forex trading in marginal accounts are very desirable and they allow traders to amass larger positions without the necessity of large deposits. You can find marginal accounts many situations with five percent of the required funds. For example five thousand dollars ($5000.00) would get a position of one million dollars ($1,000,000.00).To trade successfully and enable you to maximize your profits you need to prepare and implement a few methods of trading and be consistent and stick with them. There are a couple of methods practiced in making a decision on which trades to take advantage of are: technical analysis and fundamental analysis.The most analysis used is the technical. It applies the premise shifts come about in the Forex exchange are true and occur for a reason. The consensus being whenever a particular currency is traded towards a high it will maintain that trend. The opposite, as a rule, also holds true. Opinions of the technical Forex don't draw out predictions of long-term on the market, merely attempt to capitalize on the experiences of the past.The fundamental analysis examines all the aspects, factors and trading currency of countries involved. Such as the rate of interest, economics, rate of unemployment all taken into consideration. For example, interest rates rising suddenly can compel Forex traders to open a position which is supported by data at that time. It might also cause him to remove an active position as a means to prevent monetary loss.


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