Currency Trading
Forex trading is also known as FX or Currency trading and is a kind of trade which facilitates the exchange of one currency to another at a certain rate. Participants of forex exchange include large financial institutions such as banks. It differs from other markets such as the stock market in that it is not controlled by a central governing body and members usually trade with each other based on credit agreements. The forex business is highly competitive because participants compete with each other. The good thing about forex trading is that it is very easy to do once you learn the rules of the business and it can easily be done from home if you have access to a computer and Internet. Being an on-line business makes it unique from the other markets in that it works for 24 hours a day except on weekends i.e. from 20.15 GMT on Sunday until 22.00 GMT Friday. Trade here exists as computer entries and no physical exchange of currency takes place.
Getting started is very easy as well. Just like any other business, you need to first understand what forex trading is. Get to know what different terminologies mean and the risks involved. For example learn about different exchange rates. Exchange rates refer to the rate at which one currency is exchanged for another. Also, get to know under which conditions currency values change so that you can know when it's best to sell or buy a certain currency. You should also know things like how to read bid prices. Bid prices are usually on the left and the asking price on the right of the chart. Here, bid price refers to the price at which you or your broker is willing to buy a certain currency in exchange for another.
The second easy step involved in forex trading is choosing a broker. A broker is an intermediary between the trader and the currency market. A broker is especially useful to newbies or people who do not have much knowledge of forex exchange because they help the client in making sound decisions. They are usually in charge of managed accounts. A good broker should have been in the forex business for long (10 years or more). This means that they have good experience in the job and can provide good customer service. Also, they should be regulated by an oversight body to ensure honesty and transparency. in the U.S, this is done by the National Futures Association (N.F.A) while in the UK, it's done by the Financial Service Authority (F.S.A).
Thirdly, you open a demo account. This is used for 'training'. It helps a participant know how the business works and helps them get the hang of it. An advice to starters is that they should start slow at first. Get to know which currency is doing well and which is doing bad. You do this by looking at different countries trading positions. The more goods a country has in terms of exports the more money it ought to make and this boosts its currency value meaning it's a good choice to do business with. After getting the hang of it, you can then increase the amount of trading and expand.
All trading can be a risk!
