Forex Trading
What is Forex Trading?
Forex, or Foreign Exchange, is the simultaneous exchange of one country's currency for that of another. This market of exchange has more daily volume, both buyers and sellers, than any other in the world. Taking place in the major financial institutions across the globe, the forex market is open 24-hours a day.
Currencies are quoted in pairs. The first listed currency is known as the base currency, while the second is called the counter or quote currency. In the wholesale market, currencies are quoted using five significant numbers, with the last placeholder called a point or a pip.
The forex market is one of the most popular markets for speculation due to its enormous size, liquidity, and tendency for currencies to move in strong trends. An enticing aspect of trading currencies is the high degree of leverage available.
Advantages of forex trading
Leverage. Huge leverage is available in Forex trading, often up to 100:1 meaning that large profits can be generated from small margin deposits.
Liquidity. The enormous size and global trading of the forex markets means that the markets in the major currency pairs are very liquid making trade executions almost instant with little slippage.
Ability to go short. Since currency trading always involves buying one currency and selling another, there is no structural bias to the market. This means a trader has equal potential to profit in a rising or falling market.
Trends. Fundamentally, the value of a country's currency is determined by interest rates and the strength of the economy in relation to other countries. Currencies, therefore, have a greater tendency to trend until the fundamentals change.
Disadvantages of forex trading
Leverage. With huge leverage available to forex traders the danger is that positions which carry too much risk for the account size can be taken on, leading to margin calls. Effective money management rules must be adhered to.
Brokers. Retail traders must use a broker rather than dealing directly in the interbank market. The broker will be the counterparty in all transactions and is, effectively, making the market. They can, therefore, widen spreads or even refuse to trade during volatile trading conditions. To avoid dealing with brokers an alternative to forex is to use futures. See online futures trading for more details.
Spreads. As the retail trader must use a broker to trade, they cannot deal at the interbank rates. A broker will generally quote a fixed spread of 3-20 pips depending on the currency pair. The underlying interbank rate might be as little as 1 pip.
Forex is a very large market but for most retail traders dealing with brokers the odds are shifted against them. Online futures trading provides a much more level playing field for most traders who want to take part in forex trading.
Tim Wreford operates Online Futures Trading, a website that provides information and resources for traders. Tim also provides an article detailing the development of a day trading system, the results of which are updated daily on the site.
Latest News
Currency Trading Market Conditions Remain Challenging: Breakout ... Daily FX, NY - Sharp US Dollar gains have produced profits in several of our currency trading strategies on the week, and a continuation of US Dollar strength would make ... US Dollar Forecast to Rally Against Euro, British Pound, Fall ... |
 China Daily | Stocks drubbed at open CNNMoney.com - US crude for January delivery tumbled $3.46 to $50.99 a barrel on the New York Mercantile Exchange. In currency trading, the dollar fell against the yen and ... Video: Stocks Drop Nearly 700 on Recession Confirmation Stocks Look Ripe for Profit Taking; Manufacturing Survey Results ... |
 Voice of America | Treasury’s Lead Role in China in Flux New York Times, United States - Besides, some noted, China’s currency, by maintaining its peg to the dollar, has risen in relation to the currencies of other trading partners because the ... Yuan's Fall Watched Ahead of US-China Summit China hopes talks with US boost coordination Paulson Seeks to Broaden Access to China |
 Maktoob | Yen Strengthens as Manufacturing Slump Weakens Yuan, Ruble Bloomberg - Bank Rossii, which manages the currency against a basket of dollars and euros to mitigate the effect of currency swings, widened the ruble’s trading band to ... Dollar Rises as Global Manufacturing and Stock Markets Plunge Down Is Dollar's December Direction Yen Extends Gains as Signs of Global Recession Sap Carry Trade |
UK Pound Plunges, Gilts Rise as Data Add to Signs of Slump Bloomberg - The British currency declined against all of its 16 major counterparts tracked by Bloomberg after property Web site Hometrack Ltd. said house values in ... |
 New York Times | Some Nations That Spurned the Euro Reconsider New York Times, United States - After turmoil in the currency markets nearly destroyed the currencies of Iceland and Poland, the two countries are rethinking their opposition to the euro. ... |
GLOBAL MARKETS-Grim economic outlook pummels stocks, oil slides guardian.co.uk, UK - ... also lifting the dollar, so it's possible the dollar will get a bit of a bid out of this, but currency trading is going to be choppy," Reid added. ... |
AU Preview: Q3 GDP Should be Bo... ForexTV.com, NY - Forex (or FX or off-exchange foreign currency futures and options) trading involves substantial risk of loss and is not suitable for every investor. ... |
Ruble Plunge Prompts Doubling of Reserve Spending, Survey Shows Bloomberg - Bank Rossii buys and sells foreign currency to keep the ruble within a trading band against a basket comprised 55 percent of dollars and rest in euros. ... Russian Stocks, Ruble Drop as Production Falls More Than in ’98 |
Currency Trading Market Conditions Difficult to Forecast: Look for ... Daily FX, NY - Currency trading market conditions have been especially difficult to predict as of late, and strategy preferences for our forex trading signals are far from ... |
Resources
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Simple Forex Solution.
eBook on Currency Trading.
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Forex Trading Strategy
How to trade Currency pairs
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Global Forex Currency Trading Portal
Global Forex Currency Trading Portal, Free Forex News, Research, Trading Systems, Strategies and Education
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Forex Trading Tips - Learn how to trade EUR/USD, USD/CAD or any other major Currency pair.
Stock index Trading strategy for beginning and experienced traders alike.
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Become a High Earning Currency Trader
Become A High Earning Currency Trader by Tapping a Few Buttons on your PC
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Forex :: FXTrader.NET - The professional Forex Trader - Forex Managed Accounts for private and insti
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Get Rich Trading E-Currency! Get The Free Ecurrency Report!
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Currency Exchange Profits Video Training
Currency exchange profits | Video training for e-Currency Trading
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Day Trade Forex System:
The ULTIMATE Step-by-Step Online Currency Trading Course
Day Trade Forex Systems: Online Currency Trading Course, Advanced Trading Signal System and the Euro Fractal Trading System. Forex traders using our forex advanced signal system with specific entry and exit strategies can win trade after trade in the for
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Online Forex Trading System Ebook