What is FOREX Foreign Exchange Trading
This article will forex trading platform malaysia describe some of the fundamental principles of FOREX foreign exchange trading. This article will explain why FORES is a growing industry.
Foreign Exchange Market, or Forex as it is commonly called, is an international exchange market to buy and sell different currencies from around the world. An investor has the ability to buy and sell these currencies in order to create gains from small movements in the value of one currency over another. The Foreign Exchange Market or Forex is open from Monday at 0:00 GMT until Friday at 10:00 GMT. Forex traders do not have to adhere to the New York Stock Exchange's (NASDAQ) general trading hours.
Many investors are attracted to Forex trading by its versatility. The liquidity of the Foreign Exchange Market is also very attractive for the Forex investor as trades range from 1 to 1.5 trillion dollars on a daily basis. This massive amount of trades makes it very difficult for one trader or even a small group to have any impact on the market.
Foreign Exchange Trading is the simple act of buying and selling currency based upon the strength and fluctuation of the currency. If, for example, one was to invest $1,000 in the British Pound at 1.49989 and a 1% profit margin with the expectation that the exchange rate would rise. If that occurs and you close the exchange rate at 1.5050 you would earn roughly $400. Forex gives you a return of 40% on your investment.
Forex allows for huge profits to be made in a relatively short period of time. Stock exchange positions are usually maintained for a much longer period. Forex traders hold positions for a much shorter period of time than day traders. In the Foreign Exchange Market, you can also get marginal accounts similar to those in the stock exchange.
Forex margin accounts are a great way to engage Forex traders as they enable them to trade large amounts of currency without needing to deposit a lot. In many circumstances one can fund a marginal account with .05% the necessary funds. If you want to put it another way, $500 will allow for a position of $100,000. To trade Forex profitably and effectively, you need to have a method. There are two methods used in determining what Foreign Exchange trades one should make. There are two methods, fundamental Forex analysis, and technical Forex analysis.
Technical Forex Analysis is the most commonly used practice and uses the assumption that the changes that occur in the Foreign Exchange Market happened for a reason and are accurate. It is believed that if the currency has been moving towards a high, it will continue to move towards that high. The opposite can also be true. The technical Forex view does not try to make long term predictions about the market but instead simply tries to take advantage of what has already been seen in the past.
The fundamental Forex method considers all factors of the country where the currency is traded. The fundamental Forex method takes into consideration factors such as the country's prime interest rate, war, poverty, and the economy. If there is a sharp rise in the prime interest rate a Forex trader may take a position based on that information.
Online Forex trading on the Foreign Exchange Market has the potential of being extremely lucrative. You can start trading by opening an online Forex account and using a demo account. You will be able to better understand how the Forex trading works and how different global events affect currencies.
