Forex or Foreign Exchange trading is the largest financial market in the world. It involves all the currencies in the world and is known to exchange over 1.5 trillion dollars everyday. Foreign Exchange market is not centralized unlike the stock market and other financial market. Forex exchanges currencies through electronic networks of banks, individual traders and other financial institutions. All these financial institutions are involved in exchanging currencies all over the world.
Also, the Forex market operates 24 hours a day, making it the most liquid market in the world. Just imagine that at anytime of the day, there will always be buyers and sellers in the Forex market. You yourself are an investor in the Forex market. If you have money in your pocket, it automatically makes you an investor of the currency you are holding.
However, you probably want to let your money in your pocket grow. One way to do this is by trading your currency to buy another currency in the Forex market. What this means is that if you buy a particular currency that is currently in the low, you can earn more money when you sell it in a high. The Forex market today is available for everyone unlike in the past, only large financial institutions and banks are allowed to participate in this ever growing and liquid market.
Because of the internet, you can now participate and trade in the largest financial market in the world
To get started in trading currencies, you first need to know the basics in a Forex Market. As an individual Forex trader, you will try to determine the trends in the price movement of different currencies. You will then be buying and selling currency pairs in order to make a profit with the exchange. There are many factors you should consider that will affect the exchange rate of the currency. An example of a good currency is from countries with stable government and countries with good central banks that targets low inflation. As of now, the major currencies that are being traded are:
• US Dollar
• Japanese Yen
• British Pound
• Swiss Franc
• European Euro
Since all these currencies have stable governments and great central bank systems, it makes it the most traded currencies in the Forex Market, therefore, making it the most liquid currencies that will likely generate income. Now that you have an idea on the basics of currency trading, you will now probably ask where and how to trade. First of all, you can trade currencies of the world right in the comforts of your own home.
All you need is a desktop computer with an active internet connection. The next step would be finding websites that offers online Forex trading platform and register. A trading platform is a program that allows you to see real time-data streaming from the Forex market. It is just like turning your computer like a market terminal computer to analyze market trends, and trade.
When you register in a particular website that offers these services, you need to make sure that it meets your needs as a Forex trader. You will also be creating an account in the website you chose and deposit money in that account to be used for trading currencies. This is why you should choose a reputable website that offers these services.
The best trading platform is a complete Forex trading platform that will enable you to use and understand it easily. It should include the following:
• Eight base currencies
• Enable you to trade regular Forex or mini Forex account on the same trading screen
• Hedge your trades
• Design and use strategies
• Real-time market data streaming
• Trading news update streaming
• Risk reduction alerts by sound or flashing
• Set up price alerts
These are some of the features that you should look for in an online Forex trading platform. Having these features will enable you to maximize profit and minimize risk. However, it is always important to remember that you should have enough knowledge about the Forex market before you trade in order to minimize the risk of financial loss.