What You Need to Know About Forex Trading!
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What You Need to Know About Forex Trading!
by Ash Naeck
Trading has been around for centuries and plays an even bigger role in nowadays life. Trading is omnipresent in all aspects of life whether it is at work, at the supermarket, in a relationship or a sports game; you end up trading one thing in return of something else.
The origins of trading come from a process named bartering. The barter process is simply an exchange of goods. In the early times, one would trade an apple, for argument sake, to get a potato in return.
In this new age with technological change being the main drive to better living, bartering has been made even easier. Nowadays, money is used as a medium of exchange to acquire goods and services. Without money, this exchange in many cases would be impossible.
In the era we live today, trading is far more than an exchange of goods and services. Trading has taken new lengths and goes beyond the mere exchange of goods. This century has witnessed the rise of the currency traders. They are the ones, who trade the currencies of other countries through the process of buying and selling.
This fascinating market, where buying or selling the currency of a country against another, is called forex. With a staggering US$3.5 Trillion traded per day, this makes the forex market the biggest existing financial market to date. No other market compares to the currency market and its volatility.
Hundreds of thousands even millions of dollars are made every-day by major financial institutions dealing in the foreign exchange market. They are referred to as the movers and shakers of the currency market. Those corporations deal in millions of dollars at any given time thus causing a stir in the market. If you are not already slightly familiar with the currency quotes, you should know that the value of a currency pair goes through drastic changes every single day. These fluctuations in price allow for major profit and also may result in losses.
What makes the Forex market even more appealing than the stock and futures market is the fact that it is a 24-hour market which is opened nearly 7 days a week. Trading opens in Sydney, Australia on Monday morning. Then the Tokyo market opens followed by the European market. One hour after the open of the European market the London market becomes active. The UK market is considered to be one of the largest and most active markets in the currency world. Finally we reach the New York market, which is the last market to open each day.
EUR/USD, GBP/USD, USD/CHF and USD/JPY are referred to as the major pairs as they are backed by strong political and economical back-grounds. These pairs are the most traded ones on the currency market. Next on the list are the YEN pairs namely GBP/JPY and EUR/JPY and the commodity pairs AUD/USD, NZD/USD and USD/CAD.
My first insight in the world of trading begun when I was still at university, I was quite confused to how this process actually worked. However after some readings, it all made sense. You see, apart from using money to acquire goods and services, the same money could be use to buy or sell another currency in some other countries.
Currency trading which is the buying or selling of a country’s currency against the currency of another country is effectuated by Forex traders. They are basically speculators who take advantage of fluctuations in currency quotes to make money. If they believe a currency will appreciate they are more than likely to buy this particular currency in the hope that they will make some profit when comes the time to sell. Traders with a good knowledge of the market make a great living trading forex.
Getting involved in the forex market nowadays has never been easier. Though you will need some understanding of the market, it is still easy to get your feet wet and experience firsthand, how the dealing process works.
Here is what you will need before starting:
- PC
- Internet facility
- Some money as start-up capital
- A reliable broker
That’s it, simple and sweet
Well, it is very easy to get started however, if you want to succeed in this market, education is crucial. Without a solid proven educational program you may well take quite a while before being successful. 5 years have passed now since I started my trading career and to tell you the honest truth I still keep on learning new things every single day. Here are some great tips to follow if you want to be successful. Be humble, disciplined and teachable. Do not expect to make thousands of dollars in a matter of days. Set a goal and follow your plans. This will be help you be on track to succeed.