A Short Introduction To FOREX
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Kenneth Glover
Aug 28, 2009, 1:43:19 AM8/28/09
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FOREX is the world's largest and most liquid trading market. Many
consider FOREX as the best home business you can ever venture in. Even
though regular people have had the opportunity to take part in trading
foreign currencies for profit (in the same way banks and large
corporations do) since 1998, it is just now becoming the cool, hip,
new "thing" to talk about at parties, business events, and other
social gatherings.
Even though it has been somewhat of a loosely guarded secret, every
day more and more investors are turning to the all-electronic world of
FOREX trading for income and profit because of its numerous benefits
& advantages over traditional trading vehicles, like stocks, bonds
and commodities.
But, still, whenever something seems new or is just becoming a part of
social conversation, news articles, and water cooler gossip,
misconceptions have to be overcome, the mind has to be open and the
slate has to be clear for starting out fresh with the CORRECT
information.
So, in this article, it is my attempt to give you some solid, but not
over-detailed, information on just what the heck "FX" (FOREX) means,
what it is, and why it exists.
As a successful trader said, Trading FOREX is like picking money up
off the floor. Not trading FOREX is like leaving it there for someone
else to pick up." Others in the industry have also said, Trading FOREX
is like having an ATM machine on your own computer.
Here's an explanation (one I feel you'll appreciate) of what FOREX is
and how a bunch of traders, profit from it:
The Foreign Exchange Market, also referred to the "FOREX" or "FX"
market, is the spot (cash) market for currency.
But, don't mistake FX as trading the futures market, where you buy a
contract to purchase a particular currency at a future price in time.
What FX traders do is much less risky than trading currencies on the
futures market, much more profitable, and a lot easier, than trading
stocks.
So, you're probably wondering where it's at ... or ... how to access
the FX market?
The answer is: FX Trading is not bound to any one trading floor and is
not centralized on an exchange, as with the stock and futures markets.
The FX market is considered an Over-the-Counter (OTC) or 'Interbank'
market, due to the fact that the entire market is run electronically,
within a network of banks, continuously over a 24-hour period.
Yes, if that's the first time you've heard about an all-electronic
market, I know this may sound somewhat intriguing to you.
Here's what you are actually trading when you participate in the
Foreign Exchange (FOREX) market:
Essentially, like the large banks who use the FX market to protect
themselves from the fluctuating exchange rate of different currencies,
as an investor, what a FX trader is doing is simultaneously exchanging
one countries currency for another. So, in actuality, they're
electronically trading a currency-pair and the price that is quoted to
us is the exchange rate between the two currencies.
In other words, simply the quoted price is how many of the one
currency is worth 1 of the other currency.
Example:
EUR/USD last trade 1.2850 - One Euro is worth $1.2850 US dollars.The
first currency (in this example, the EURO) is referred to as the base
currency and the second (/USD) as the counter or quote currency.
The FOREX has a DAILY trading volume of around $1.5 trillion dollars -
30 times larger than the combined volume of all U.S. equity markets.
This means that 1,498,574 skilled traders could each take 1 million
dollars out of the FOREX market every day and the FOREX would still
have more money left than the New York Stock exchange every day!
The FOREX plays a vital role in the world economy and there will
always be a tremendous need for the FOREX. International trade
increases as technology and communication increases. As long as there
is international trade, there will be a FOREX market. The FX market
has to exist so a country like Japan can sell products in the United
States and be able to receive Japanese Yen in exchange for US Dollar.
There's plenty of money to be made using FOREX for plenty of traders
that use the right trading techniques / tactics that will allow them
to profit immensely. And, with only 5% of the daily turnover of volume
coming from banks, government and large corporations who need to
hedge, the other 95% is for speculation and profit.
http://www.1-forex.com
Trade With 95.82% Accuracy In Every Single Market Condition :
http://fxmdrbtcr.hot.to/
consider FOREX as the best home business you can ever venture in. Even
though regular people have had the opportunity to take part in trading
foreign currencies for profit (in the same way banks and large
corporations do) since 1998, it is just now becoming the cool, hip,
new "thing" to talk about at parties, business events, and other
social gatherings.
Even though it has been somewhat of a loosely guarded secret, every
day more and more investors are turning to the all-electronic world of
FOREX trading for income and profit because of its numerous benefits
& advantages over traditional trading vehicles, like stocks, bonds
and commodities.
But, still, whenever something seems new or is just becoming a part of
social conversation, news articles, and water cooler gossip,
misconceptions have to be overcome, the mind has to be open and the
slate has to be clear for starting out fresh with the CORRECT
information.
So, in this article, it is my attempt to give you some solid, but not
over-detailed, information on just what the heck "FX" (FOREX) means,
what it is, and why it exists.
As a successful trader said, Trading FOREX is like picking money up
off the floor. Not trading FOREX is like leaving it there for someone
else to pick up." Others in the industry have also said, Trading FOREX
is like having an ATM machine on your own computer.
Here's an explanation (one I feel you'll appreciate) of what FOREX is
and how a bunch of traders, profit from it:
The Foreign Exchange Market, also referred to the "FOREX" or "FX"
market, is the spot (cash) market for currency.
But, don't mistake FX as trading the futures market, where you buy a
contract to purchase a particular currency at a future price in time.
What FX traders do is much less risky than trading currencies on the
futures market, much more profitable, and a lot easier, than trading
stocks.
So, you're probably wondering where it's at ... or ... how to access
the FX market?
The answer is: FX Trading is not bound to any one trading floor and is
not centralized on an exchange, as with the stock and futures markets.
The FX market is considered an Over-the-Counter (OTC) or 'Interbank'
market, due to the fact that the entire market is run electronically,
within a network of banks, continuously over a 24-hour period.
Yes, if that's the first time you've heard about an all-electronic
market, I know this may sound somewhat intriguing to you.
Here's what you are actually trading when you participate in the
Foreign Exchange (FOREX) market:
Essentially, like the large banks who use the FX market to protect
themselves from the fluctuating exchange rate of different currencies,
as an investor, what a FX trader is doing is simultaneously exchanging
one countries currency for another. So, in actuality, they're
electronically trading a currency-pair and the price that is quoted to
us is the exchange rate between the two currencies.
In other words, simply the quoted price is how many of the one
currency is worth 1 of the other currency.
Example:
EUR/USD last trade 1.2850 - One Euro is worth $1.2850 US dollars.The
first currency (in this example, the EURO) is referred to as the base
currency and the second (/USD) as the counter or quote currency.
The FOREX has a DAILY trading volume of around $1.5 trillion dollars -
30 times larger than the combined volume of all U.S. equity markets.
This means that 1,498,574 skilled traders could each take 1 million
dollars out of the FOREX market every day and the FOREX would still
have more money left than the New York Stock exchange every day!
The FOREX plays a vital role in the world economy and there will
always be a tremendous need for the FOREX. International trade
increases as technology and communication increases. As long as there
is international trade, there will be a FOREX market. The FX market
has to exist so a country like Japan can sell products in the United
States and be able to receive Japanese Yen in exchange for US Dollar.
There's plenty of money to be made using FOREX for plenty of traders
that use the right trading techniques / tactics that will allow them
to profit immensely. And, with only 5% of the daily turnover of volume
coming from banks, government and large corporations who need to
hedge, the other 95% is for speculation and profit.
http://www.1-forex.com
Trade With 95.82% Accuracy In Every Single Market Condition :
http://fxmdrbtcr.hot.to/
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