Forex Trading
The foreign exchange market, also knows as FOREX, originated in
1973 has become the largest e-currency trade market in the world
today. FOREX trading occurs 24 hours a day, 5 days a week. The
FOREX market offers a unique trading opportunity to those
seeking a substantial profit in a market that trades over 1.2
trillion dollars each day.
FOREX is primarily traded between central banks, commercial
banks, non-banking International Corporation, hedge funds,
private investors and speculators. Previously small investors
were unable to trade in the FOREX market due to the large
deposit required. However until recent years, with the
continuing growth of the internet and competition, small
investors can now open a FOREX account with as little as $250.
There are a few factors as to why FOREX is starting to attract
more small investors. For one, FOREX can be traded 24 hours a
day 5 days a week. Previously trades were placed by phone, the
internet has made it possible for traders to monitor their
accounts from home and execute trades in real time with the
click of a mouse button.
In order to start trading in the FOREX market, one must first
open an account with a broker. It is recommended to obtain a
list of brokers and do some research before deciding on which
broker to deal with. Each broker offers different policies and
different spreads on each currency that is traded.
Before trading in FOREX, one must first understand the risk and
reward behind margin trading in FOREX. A margined account can be
leveraged, which means trading in FOREX can be done with solely
cash or a combination of cash and collateral such as a security
deposit. The main risk involved in margin trading is that margin
trading tends to inflate loss. In addition the rate of loss and
leverage makes FOREX a high risk investment. However, regardless
of the downside in margin trading, FOREX is still very
profitable as huge gains can be made.
There are plenty of resources on the internet that will discuss
trading strategies, emotions and what it takes to become a
successful trader. Most of these websites are going to tell you
that emotions play the largest roll in your success as a trader.