Forex trading, or the foreign exchange trading market (also commonly known as FX trading or simply, currency exchange,
involves trading one currency for another. Forex is by far and away the
largest financial market in the world. Trades are made between large
banks, central banks, currency speculators, multinational corporations,
governments, and even the other financial markets. According to The Bank
for International Settlements (BIS), a world-wide central bank
organization, the average daily trade in the global forex and related
markets is currently over three trillion US dollars – A DAY. This is
several times larger than all the U.S stock markets combined. The
trading is done from all round the world, with little or no hard cash
changing hands.
Wednesday, October 19, 2011
Forex Trading vs Stock Market
Two of the main differences between (and some would say advantages over) the forex market compared to the stock market are:
1. Trading hours. The
forex market is open 24 hours a day. Trading is done over three
continents, allowing a trader to trade continuously and to react
immediately to events and new developments. The market opens on Sunday
evening and closes Friday night.
Thursday, September 29, 2011
Forex Trading Guide - FX Trading for Dummies
Forex trading, or the foreign exchange trading market (also commonly known as FX trading or simply, currency exchange, involves trading one currency for another. Forex is by far and away the largest financial market in the world. Trades are made between large banks, central banks, currency speculators, multinational corporations, governments, and even the other financial markets. According to The Bank for International Settlements (BIS), a world-wide central bank organization, the average daily trade in the global forex and related markets is currently over three trillion US dollars – A DAY. This is several times larger than all the U.S stock markets combined. The trading is done from all round the world, with little or no hard cash changing hands.
Forex Trading vs Stock Marke
Two of the main differences between (and some would say advantages over) the forex market compared to the stock market are:
1. Trading hours. The forex market is open 24 hours a day. Trading is done over three continents, allowing a trader to trade continuously and to react immediately to events and new developments. The market opens on Sunday evening and closes Friday night.
Spreads in Forex Trading
The BID price is the price at which a client can sell a unit of the base currency (in return for buying the secondary currency) and the ASK/OFFER price is the price at which a client can buy a unit of the base currency. For example, if the quote for the exchange rate of the Euro/U.S. Dollar in the market is 1.2583/1.2586, this means that the client can pay $1.2586 in order to buy one Euro (the base currency) and will receive $1.2583 if one Euro is sold. The BID price is lower than the ASK price and the difference or 'spread' between the two numbers is measured in 'pips' (3 pips here) and represents the profit of the dealing room or trading house.
Retail forex brokers or " market makers ," working on behalf of retail clients only handle a tiny fraction of the forex market. One retail broker estimates the total retail volume at $25–50 billion daily, which is approximately 2% of the whole market. Nonetheless, this is a substantial market for the individual trader and the ready availability of good quality trading platforms means this is an ever growing segment.
Trading Concepts and Mechanis
Currency Pairs
Currency prices can only fluctuate relative to another currency, so they are always traded in pairs. Two of the most common currency pairs are the price for euros in US dollars EUR/USDand the price for the British pound in US dollars GBP/USD
Wednesday, September 28, 2011
Tuesday, September 27, 2011
Saturday, September 24, 2011
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