That Means That A Trader Can Enter Or Exit The Currency Market Whenever They Want

Category: Finance, Currency Trading.

Online currency trading( also known as FOREX, for foreign exchange) has all the benefits that a trader could want. Whenever you see fit.

With the 24 hour, 6 days a week marketplace, you can trade before work, or after work, during work. The day begins in New Zealand and follows the sun through Asia, and then the, into Europe US. The FOREX market is the most liquid market in the world. Then it starts all over again. That means that a trader can enter or exit the currency market whenever they want. This market is bigger in daily volume than all of the other stock, and futures markets, bond of the world combined! With no commissions and no gaps, and no daily, or lock limits trading limit either.

And then some! Compare that to the 2 to 1 margin accounts at your stock brokerage. Leverage of 100 to 1 is considered normal when currency trading. Plus, there s no margin interest expense either. You ve heard the saying, the trend is your friend. But you better have your risk management system in place because, leverage cuts both, remember ways. Well guess what the best trending market is?

Central banks and governments set their own monetary policy. That s right, the FOREX market. Take the Fed for example. And then raise them again. They don t( usually) raise interest rates today and then next week lower them. No, they tend to gradually, raise them, over time, month by month, until they feel they are correctly positioned. That gradual tightening and loosening over an extended period of time is what creates those wonderful trends.

And then they lower them, or quarter by, month by month quarter, whichever. When you are trading currencies online, remember to trade with the trend. It s that simple, just not that easy. And when the trend ends, get out. Then start looking for the trend to reverse itself. At any given time, approximately a third of the currency pairs are are going up, a third are going down, and the other third are going sideways. You need to have no hang ups about being long or short when you trade currencies.

So don t be afraid to go short. You just decide to buy or sell. If you are coming from the stock market, there are no short squeezes to worry about, no one uptick rule, or any other crazy rules. That s it. An example of a currency pair is the popularly traded EUR/ USD. When you trade currencies online, they are always bought and sold in pairs. This is the Euro vs. the U.

Dollar. The currency on the left is called the base currency. If you buy the EUR/ USD currency pair, you are buying euros, and at the same time, selling dollars. The one on the right is the cross currency. You would do this if you think the Euro is going to rise in value and/ or you think the Dollar is going to fall in value. You would do this if you think the Euro is going to decline in value and/ or you think the Dollar is going to rise in value.

If you sell the EUR/ USD currency pair, you are selling euros, and at the same time, buying dollars. Currency trading has so many benefits and advantages to it, it is no wonder why it is the fastest growing segment of the online trading community. The FOREX market offers superior potential to realize profits in any market condition or business cycle, making online currency trading an ideal diversification element in your total investment portfolio.

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