Updated on November 23, 2018 by admin
Foreign Exchange Market (FOREX) is the arena where a nation's currency is exchanged for that of another at a mutually agreed rate. All treaties are traded in pairs, and each is assigned with an abbreviation. (Eg: USD = United States Dollar, GBP = Great British Pound). Exchange rate fluctuations are usually caused by actual monetary flows as well as anticipations on global economic situations. Profits and losses are dependent on the fluctuations in the exchange rate between the two treaties.
In today's volatile money market environment the traditional forms of investing are rightfully inviting more scrutiny and caution. The New Year has brought with it an impending sense of tough times to come. The FTSE 100 collapsed below 6,000 points for the first time in almost two years, a performance that was mirrored by Dow Jones, Hang Seng and other major indonesia around the world. Now more than ever investors are focusing on alternative avenues to channel those hard earned funds.
FOREX is a serious game. Play it with the pros.
Forex trading involves substantive risk of loss, and may not be suitable for everyone.
Advantages of Trading Forex
It may be difficult to imagine that there is a market that is not only growing, but is also renamed for its flexibility and liquidity. Forex is flexible in the sense that it has no central trading location or exchange with traders, sellers and buyers in the traditional sense; most of the trading is connected via a global ETS (electronic trading system) that operate 24hrs a day. Concurrently, liquidity is a powerful attraction to any investor as it suggests the freedom to enter or exit the market at anytime. These advantages subsequently enable investors to respond to any new adverse or positive information immediately. A luxury not afforded by the more traditional forms of risk.
Also, in forex trading, a small margin deposit can control a much larger total forex contract value. This obviously gives investors the ability to make extraordinary profits with relatively minimal risk. Unlike with other forms of risk where numerous factors affect the unit prices, (a good example of course is the recent sub-prime crisis in the US) the chief aim and focus of any good forex investor is to manage as best as possible the varying risks associated with fluctuations in worldwide treaties. With the current trepidation that characterizes traditional forms of investments, it is no surprise that there has been a big growth in regulated firms that offer forex investment contracts to cunning individual investors.
It must be said however that a good understanding of the relationship between freely transferable treaties is required in order to dabble into this exciting arena. The concept really is quite simple. Currency exchange rates fluctuate, investors who trade in the forex market hope to profit from those fluctuations. Investors should always be aware though that as with any other form of investment, investors who consult with a financial advisor limit their exposure to excessive fluctuations. A general rule of …