Foreign Exchange Trading (Forex) allows
an investor to participate in profitable of world currencies. Forex trading
works by selecting pairs of currencies and then measuring profit or loss by the
fluctuations of one currency's market activity compared to the other. For
example, fluctuations in the value of the U.S. Dollar are measured against
another world currency such as the Great Britain Pound, Euro, Japanese Yen,Gold,Silver,Oil
etc. Being able to discern price trends in forex market activity is the essence
of all profitable forex trading and this is what makes foreign currencies so
exciting, currencies are the world's 'best trending' market. This gives Forex Traders
a profit making that is not available in most other markets.
Forex is being called 'today's exciting new investment opportunity for the investors'. The reason is that the Forex Trading Market only began to emerge in 1978, when worldwide currencies were allowed to 'float' according to supply and demand, after 7 years the Gold Standard was abandoned. Before 1995 Forex Trading was only available to banks and large multinational corporations but today this highly profitable market is open to everyone. The Forex Trading Market's growth has been unprecedented, explosive, and continues to be unequaled by any other trading market.
Unlike traditional trading which brings buyers and sellers together in a central location in Forex Trading there is no need for a central location. Forex is a market where worldwide traders conduct business by high-speed Internet connections with the Interbank Foreign Currency Exchange via Forex Clearinghouses (also called Forex Brokerage Firms). Forex has not only become the fastest growing trading market, but also the most profitable trading marketplace in the world.
Forex is the most profitable because it is the world's largest marketplace. The Foreign Currency market as a whole accounts for over 1.2 trillion dollars of trading per day (as determined by the fourth Central Bank Survey of Foreign Exchange. It is 75 times greater than the New York Stock Exchange where the average total daily value of both foreign and domestic stocks is $16 billion, and much greater than the daily activity on the London Stock Exchange, with $11 billion.
Furthermore, in addition to being the world's largest and most profitable market, The Foreign Currency Exchange Market (forex) is the world's most powerful and persistent trading market regardless of negative economic indicators. This is because currencies 'trend' better than every other market due to their macro-economic nature. Unlike many commodities whose supply and demand fundamentals can literally change currency fundamentals are much less random, and far more predictable. This is well illustrated in the way interest rates are changed gradually and only in small increments.
Other examples of fundamental predictability are illustrated by the following statistics. Daily $1.2 trillion trading in Foreign Currency Exchange, 83% of spot foreign exchange activity and 92% of swap activity involves US Dollars. The Euro is the second most currency at 37%. The Japanese Yen (24%) and the British Pound Sterling (11%) are ranked third and fourth. The Swiss Franc is 8%, and the Canadian and Australian Dollars account for 4%.
Forex trade is self-traders concentrate most of their investment activity for reasons that are self-business. By definition, a Spot Forex transaction is a currency trade transaction that has a settlement (liquidation) within a maximum of 2 working days following the closing of the trade. Therefore Spot Forex allows the self-trader high liquidity. Another popular feature for well-advised Spot Forex self-traders is the strong profit potential from continual market fluctuations by buying a specific currency when it is weaker and selling it when it is stronger, and the continual pairing of strong currencies against weak ones. This potential for profit or loss is amplified by the effect of leverage. Leverage is a term that describes what can be achieved when a smaller amount of money controls a much larger amount of money. With regards to Forex Trading for example, a leverage-factor of 100 can allow the trader to hold a 100,000 US Dollar position with a modest 1,000 US Dollar margin deposit. Online Forex day trading focuses its investment activity largely on Spot Forex because of the 'risk manageability' of in-and-out trading plus the potential to generate excellent and highly liquid profits.
Despite its high trading volume and its fundamental role in the world, the Forex Market is rarely in the media limelight because its method of trading transaction is less visible than the Floor of a Stock Exchange. However, trading on the Foreign Currency Exchange Market is today surging into the public awareness, as flocks of internet traders are attracted by the market's inherent profitability and risk manageability. Forex market is open to all .
Forex is being called 'today's exciting new investment opportunity for the investors'. The reason is that the Forex Trading Market only began to emerge in 1978, when worldwide currencies were allowed to 'float' according to supply and demand, after 7 years the Gold Standard was abandoned. Before 1995 Forex Trading was only available to banks and large multinational corporations but today this highly profitable market is open to everyone. The Forex Trading Market's growth has been unprecedented, explosive, and continues to be unequaled by any other trading market.
Unlike traditional trading which brings buyers and sellers together in a central location in Forex Trading there is no need for a central location. Forex is a market where worldwide traders conduct business by high-speed Internet connections with the Interbank Foreign Currency Exchange via Forex Clearinghouses (also called Forex Brokerage Firms). Forex has not only become the fastest growing trading market, but also the most profitable trading marketplace in the world.
Forex is the most profitable because it is the world's largest marketplace. The Foreign Currency market as a whole accounts for over 1.2 trillion dollars of trading per day (as determined by the fourth Central Bank Survey of Foreign Exchange. It is 75 times greater than the New York Stock Exchange where the average total daily value of both foreign and domestic stocks is $16 billion, and much greater than the daily activity on the London Stock Exchange, with $11 billion.
Furthermore, in addition to being the world's largest and most profitable market, The Foreign Currency Exchange Market (forex) is the world's most powerful and persistent trading market regardless of negative economic indicators. This is because currencies 'trend' better than every other market due to their macro-economic nature. Unlike many commodities whose supply and demand fundamentals can literally change currency fundamentals are much less random, and far more predictable. This is well illustrated in the way interest rates are changed gradually and only in small increments.
Other examples of fundamental predictability are illustrated by the following statistics. Daily $1.2 trillion trading in Foreign Currency Exchange, 83% of spot foreign exchange activity and 92% of swap activity involves US Dollars. The Euro is the second most currency at 37%. The Japanese Yen (24%) and the British Pound Sterling (11%) are ranked third and fourth. The Swiss Franc is 8%, and the Canadian and Australian Dollars account for 4%.
Forex trade is self-traders concentrate most of their investment activity for reasons that are self-business. By definition, a Spot Forex transaction is a currency trade transaction that has a settlement (liquidation) within a maximum of 2 working days following the closing of the trade. Therefore Spot Forex allows the self-trader high liquidity. Another popular feature for well-advised Spot Forex self-traders is the strong profit potential from continual market fluctuations by buying a specific currency when it is weaker and selling it when it is stronger, and the continual pairing of strong currencies against weak ones. This potential for profit or loss is amplified by the effect of leverage. Leverage is a term that describes what can be achieved when a smaller amount of money controls a much larger amount of money. With regards to Forex Trading for example, a leverage-factor of 100 can allow the trader to hold a 100,000 US Dollar position with a modest 1,000 US Dollar margin deposit. Online Forex day trading focuses its investment activity largely on Spot Forex because of the 'risk manageability' of in-and-out trading plus the potential to generate excellent and highly liquid profits.
Despite its high trading volume and its fundamental role in the world, the Forex Market is rarely in the media limelight because its method of trading transaction is less visible than the Floor of a Stock Exchange. However, trading on the Foreign Currency Exchange Market is today surging into the public awareness, as flocks of internet traders are attracted by the market's inherent profitability and risk manageability. Forex market is open to all .
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