international currency trading

Fx Online Trading: A Brief Introduction

For a novice, forex currency trading or international currency trading as it is sometimes known, may seem to be a whole new world but the nuts and bolts of the system are relatively straight forward once you have learnt the basics. You initially just need to get an understanding of the terminology and trading terms to see how the markets work.

 

Making big money quickly is what forex currency trading is all about. It is possible for investors to make big profits very fast because the rates of exchange on the forex market can rise and fall very quickly. This means of course that it is risky and there is also a chance of losing big, just like most things that have the chance of big returns on your investment.

 

As you will know if you have ever exchanged currency for a vacation, the rates constantly move, even throughout the day. For example you may change $100 into Euros before your European trip, and then find that you have not spent it all when you return so need to change it back to US Dollars. The exchange rate will probably have moved whilst you were away and you could have made a small profit after charges once you have changed it back.

 

Foreign currency trading is all about changing currencies hoping to make a profit all of the time, but instead of changing money at the bank they use a broker or more often these days an online currency trading system. There are actually many similarities to stock trading where your small deposit can be used to leverage much bigger deals. One difference from stock exchange trading is that fx traders are not limited to dealing in one country.

 

You can trade any two currencies wherever you live. This means that the market is truly international. Due to the various time zones around the world, the forex trading hours are all day long from Monday morning in Australia to Friday afternoon in New York.

 

Each of the major currencies is represented by 3 letters: USD for the US dollar, EUR for the Euro, GBP for the British pound,  CHF for the Swiss franc, JPY for the Japanese Yen, , CAD for the Canadian dollar, AUD for the Australian dollar etc. The exchange rate between two currencies may be expressed like this: USD/GBP 0.68. This means that to buy one US dollar you will need 0.68 British Pounds.

 

If you want to start out in fx trading you will need to look for a broker that you think are trustworthy that can set you up with a currency trading account. It is worth shopping around and checking the forex trading forums for tips and recommendations. Check out how long the company has been in business and what your rights and liabilities will be. Read all of the fine print so you are not surprised by additional charges that you were not expecting.

 

You will probably also want to use a bot to do your trading for you. This is automated forex trading software that can trade 24 hours a day according to the rules and restrictions that you set for it. There is usually a demonstration option so that you can paper trade with the online currency trading system for a while before you actually bite the bullet and trade with real money. There are many forex robots on the market and most of them come with full instructions and currency trading tutorials.

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Wednesday, May 13th, 2009 Introduction No Comments