subject: The Most Powerful Way to Trade Forex [print this page] Forex is the abbreviated term for the foreign exchange markets, also known as the foreign currency markets. Just under $4 trillion in currency is traded on the forex each business day, Monday through Friday - 24 hours per day.
Like the Internet itself (over which many foreign exchange transactions are in fact made), the foreign currency market is decentralized, meaning that it consists of a series of affiliated markets that are connected together. The major players in the market are central governmental banks and mega-banks such as Deutsche Bank (21% of market share by trade volume), the Swiss UBS AG (15%), and Barclays Capital (11%). However, thousands of investment firms, industrial enterprises, and individual investors also participate in forex trading each day.
There is single no person, organization, bank or company out there that sets the value of any currency. (Note: there are some currencies that are pegged to, for example, the U.S. dollar, but these are also subject to market forces in terms of valuation). Instead, the value of any given currency is actually determined by what the aggregate - the market as a whole - is willing to sell and buy it for at that moment. Of course, the whole market is interconnected, so that the devaluation of one currency could lead to an increase in value of another currency. The point is: nobody can corner, or control, the whole market. It is just too big.
Many people want to get into the forex market as an investor but aren't exactly sure how to get started. When trading for profit, it is wise to learn the most powerful way to trade forex.
Here are some tips:
1. Start small. You can open your own foreign exchange account for as little as $50. It is wise to begin your foray into this exciting field slowly - rather than all at once. The term "baby steps" definitely applies here. And, if you elect to use forex trading software to do your trading for you (see below), you will of course want to prove to yourself that it is making you money before you start putting more of your own money into your trading account.
2. Come to understand the basic idea between foreign exchange trading. The basic idea, incidentally, is pretty simple: you want to sell currency that you believe will be less valuable at some future time - or buy currency that you believe will be more valuable at a future time. However, since nobody can outsmart the market on their own, it is helpful to have trading software to place your buys and sells on your behalf.
3. Once you have opened your account and started training, you have two choices: become an expert in forex trading (the hard way) or buy software that makes trades for you, automatically, while you are busy doing other things like working, playing or sleeping (the much easier way).
Trading forex on your own will require months or years of self-training: going to seminars, reading books, and talking to other traders. The automated trading software option is by far the easiest road to take. Some people prefer to do everything themselves. If that describes you: don't go the software route. However, other folks know that they are too busy with their work and personal lives to become fully proficient in the foreign exchange markets - yet they still want to profit like the hardcore investors who really get how it all works. For this second set of folks, going the automated software route is recommended.
The Most Powerful Way to Trade Forex
By: Robbie T. James
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