19‏/07‏/2009

Currency Trading facts and history

There are some benefits and advantages for trading currencies on the Foreign Exchange, better known as Forex . The Forex Currency Trading Exchange was established in 1971. This market grew at a steady rate across the 1970's, but in the 1980's Forex grew from trading $70 bill a day to over $1.5 trillion every day. There are a few giant players in Foreign exchange, but it is accessible to the individual trader . Each lot traded is worth roughly $100,000. By employing leverage, an individual trader is only needed to have a $1000 investment in the trade. This may be a 100:1 leverage.

No other market offers this quantity of leverage.

Forex is also an highly liquid market. Because it's so giant, you should buy or sell in only seconds where your trade is only a mouse click away. You may also preset an automated close for your position. This implies you do not have to sit and watch your position, just place the trade, set an exit point and go what you need. Currency trades just about 24 hours, seven days every week.

It only closes from Fri. afternoon till Sun. evening. This makes it feasible to set your own trading hours. If you trade part time and need to place your trade at 3am, log into your account and trade. If you're a full time trader, the same applies. No other market allows you to pick the hours you trade. There are no commissions charged on Forex, only a tiny exchange fee. This isn't probable in any other market, as brokers charge a commission on each trade in all the other markets. Because currencies are traded in pairs, so you are purchasing one currency and selling the other. For instance, if a stockholder believes the US dollar will gain against the Euro Buck, you would buy the US buck and sell the Euro dollar. It's just that easy. The potential for profit is good as there's always movement between currencies. Even a little change may lead to important profits due to the big quantity of cash concerned in the exchange. Firstly, before just opening an account and blindly making some trades, you want correct coaching. Observe the market, learn the terms employed in trading, set up a demo account with a currency broker. Then, and only then, use real cash to trade.


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