Saturday, 13 April 2013

CURRENCY TRADING

WHAT IS CURRENCY OR FINANCIAL TRADING?

Financial Trading can be very lucrative and highly profitable method of generating profits from financial markets. It is possible to achieve returns many times in excess of traditional equity buy and hold investments such as shares and bonds over shorter time periods.

Yet for many individuals, the simple label of 'trading' can prove off-putting when assessing investment strategies. Trading is commonly associated with highly speculative investments that require both high level of competence to execute successfully and an even higher tolerance of risk. For many, the perception of trading is that it is somehow beyond them; too complicated, too time consuming and ultimately too risky a place to put their hard-earned cash.

Foreign Exchange, or as some people refer to it: "Forex, "FX", or Currency exchange", is the largest financial market in the world.

The daily turnover in this huge market is around 4 trillion Dollars a day! This is about 1000 times as much as the New York Stock Exchange (NYSE).

The Forex market is also the oldest existing market, because as long as two countries traded with each other, they needed their currencies exchanged. If you live in the United States and would like to travel to Europe, you'd have to exchange you $$ for Euro.

Thus, trading in the forex market simply means that you are simultaneously buy one sell another, for example buying Euros in exchange for Dollars.



If you want to trade the forex market for profit, you will open a trading account with an online broker as opposed to going to a change shop to exchange your travel money