Currency Trading FOREX
Day Trading FOREX?or Fx market is made for individuals who want to make cash trading foreign currencies. On stock market you actually trade papers which represent companies, and in FOREX market you also trade papers that stand for whole countries.
In FOREX, trading instruments are currency pairs such as EURUSD, USDCAD, USDJPY, and so on. You do operations on FOREX like buying and selling. In FOREX trading jargon, when you are said to ?buy EURUSD? pair, you will sell your US dollars and buy Euro at the current exchange rate as determined by your broker. When you close this position, you sell these Euros and buy US dollars back. Depending on whether Euro appreciated or depreciated in value, you win or lose.
Currency Trading FOREX usually involves leveraging because prices of currencies do not change that much as stocks do. Without leveraging, you would have to have extremely large amounts of money on your live account in order to make a buck trading FOREX.
Normally, broker will gladly (and automatically) extend a leverage to you when you are trading currency with them. Most common leverage is 100:1, sometimes 20:1 or 50:1. This really means that for each dollar you trade, broker adds 99, 19 or 49 respectively from his own money. Some would even give you 200:1 leverage, but it is very risky for you and very few people use it.
Normally you use a computer and a special software to trade FOREX. One of the most popular programs for it today is called MetaTrader. Many brokers let you trade stocks and FOREX simultaneously using the same terminal.
Currency Trading FOREX is considered to be more risky than stock trading due to a very high volatility of the currency pairs offered as instruments. But on the other hand high volatility gives you plenty of opportunities for big returns.
With a good trading system, money management and well-defined rules you can safely make a buck to afford a lifestyle of your choice by trading currencies.
Source: http://www.themoneynewspaper.com/currency-trading-forex-is-easy.html
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