WHAT IS THE FOREIGN EXCHANGE MARKET
Disclaimer , To whom it may concern , ForexWinners is NOT the cracker
for any trading system , indicator or Expert Advisor on the website. And
any product on the website is NOT a suggestion or a recommendation from
ForexWinners. Most importantly, do not invest money you cannot afford
to lose.
If
you don’t already know, attempting to learn the ins and outs of the FX/
Foreign exchange market can like running into hell with flammable
shorts! (that’s
if you go ahead without AstroFx mentoring of course ) whilst getting to grips with the terminology alone can turn you insane!
In
simple terms, the forex market is actively traded 5 days a week, 24
hours a day opening 10pm on a Sunday night and closing at 10pm on a
Friday night.
Businesses, investors, governments, banks and retail traders ( such as
yourself) exchange and speculate on the currencies that are available
through an online broker, ultimately using probabilities (
fundamental/technical analysis) to predict the currencies next move
either up or down!
These
currencies are traded in pairs, for example Euro/US Dollar (EUR/USD) or
US Dollar/Japanese Yen (USD/JPY) and anybody, anywhere is able to
profit from the correct judgement and direction of their constant price
fluctuations. The Forex market is the largest and most liquid market in
the whole world with an average daily turnover of $4.98 Trillion dollars
( toppling over the stock market which is in the billions )
The
main forex trading centres worldwide include: London, New York, Zurich,
Frankfurt, Hong Kong, Singapore, Paris and Sydney. Once you have
familiar-
ised yourself with a currency pair and your research indicates a certain
position that you feel you will profit from, you may then work that
position all day and night if you wish. Allowing you to potentially
accumulate greater profits in a shorter amount of time than you could
achieve if you were to trade stocks.
Forex V’s Stocks
You may be asking, what is the difference between trading forex cross
pair currencies in comparison to trading stocks? Well... whilst the
stock market is the
most traditional method to profit from an investment, it can turn into a
time consuming and daunting experience, since there are tens of
thousands of companies to choose to invest in out there.It is rather
difficult to perfect a system that will make you more than 10-15%
returns on a yearly basis and it is impossible to truly know when a
company will decide to go bankrupt or fail completely. This is not to
say one cannot make exceptional gains trading stocks, however it carries
with it an immense risk and uncertainty when trying to play individual
stocks for 20-30% gains in a short period of time.
In
comparison to stocks, the Forex market is far simpler in nature,
although it may entail a lot more self-education, since there are not as
many commercial TV shows and learning guides dedicated to FX trading as
there is with stocks. You should also note that there is in fact no
central market place for the forex market and trading is said to be
conducted ‘over the counter’, which is unlike stocks where all orders
are processed via the central market place such as the NYSE.
The
currency pairs traded in FX are products quoted by all the major banks,
which are then fed through the broker (also known as the market
middleman) who then delivers an overall average price to the retail
trader (that’s you) to buy or sell with. So in forex, as there is no
central market place, effectively it is
the broker who is transacting your desired trades, ‘making the market’
if you will. Therefore when you buy a currency pair it is your broker
actively selling it to you, not another trader!
