.: What Is Currency Trading?
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Currency trading is the largest market on the planet. It is estimated that in excess of US$2 trillion is traded every day. Compare this to the New York Stock Exchange's daily transactions of approximately US$50 billion, and you can see that the magnitude of the currency trading market exceeds all other equity markets in the world combined. The practice of currency trading is also commonly referred to as foreign exchange, Forex, or FX, for short.
All currency has a value relative to other currencies on the planet. Currency trading uses the purchase and sale of large quantities of currency to leverage the shifts in relative value into profit.
What is the FX market?
The FX market is different from other markets in some other key ways that are sure to raise eyebrows. Think that the EUR/USD is going to spiral downward? Feel free to short the pair at will. There is no uptick rule in FX as there is in stocks. There are also no limits on the size of your position (as there are in futures); so, in theory, you could sell $100 billion worth of currency if you had the capital to do it. If your biggest Japanese client, who also happens to golf with Toshihiko Fukui, the Governor of the Bank of Japan, told you on the golf course that BOJ is planning to raise rates at its next meeting, you could go right ahead and buy as much yen as you like. No one will ever prosecute you for insider trading should your bet pay off. There is no such thing as insider trading in FX; in fact, European economic data, such as German employment figures, are often leaked days before they are officially released.
Which currencies are Traded?
Although some retail dealers trade exotic currencies such as the Thai baht or the Czech koruna, the majority trade the seven most liquid currency pairs in the world, which are the four majors:
EUR/USD (euro/dollar)
USD/JPY (dollar/Japanese yen)
GBP/USD (British pound/dollar)
USD/CHF (dollar/Swiss franc)
and the three commodity pairs:
AUD/USD (Australian dollar/dollar)
USD/CAD (dollar/Canadian dollar)
NZD/USD (New Zealand dollar/dollar)
These currency pairs, along with their various combinations (such as EUR/JPY, GBP/JPY and EUR/GBP) account for more than 95% of all speculative trading in FX. Given the small number of trading instruments - only 18 pairs and crosses are actively traded - the FX market is far more concentrated than the stock market.
Article keywords: currency trading, currency, trading, money, currencies, capital, liquid currency, FX market, stock exchange
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.: New Currency Trading Articles
1). A Closer Look At Some Of The Investment Myths In The Foreign Exchange Markets
Just like anything else there is a learning curve plus there is a lot of research and strategy that goes on behind the scenes to make a trade successful. I have written this article to help you avoid some of the more common investment myths so you will know what to realistically expect when you begin trading.
2). How To Avoid Some Common Forex Scams
There is an old saying that states, "A Fool and his Money are Easily Parted". With the proper strategy and resources from which to educate yourself, there is no reason to be foolish.
3). How To Choose The Correct Forex Trading Software For You
Just like with stock trading, there are a large number of software programs you can use to make your foray into the foreign currency exchange markets. You will find that you have two basic choices, either web based or desktop based programs.
4). Pattern Recognition And Why You Need To Learn It To Be Successful In Forex Trading
Pattern recognition is a method that will help you to be a much more successful trader. Just as with regular stock trading, the foreign currency exchange markets will very often repeat certain patterns over time.
5). How To Keep From Losing When Trading In The Forex Markets
Just as with any investment, the entire goal of investing in the foreign currency exchange market is to make a profit. The thing you must always remember though, is that just like with any other market investment, you can also lose. The reason that savings accounts and insurance policies pay such low rates of interest is because of the lack of risk.
6). Earn Unlimited Money Trading in Global Forex
What is needed to make huge amounts of money in the FX-market each day? How can you do the same ? We are giving you a head start.
7). The FOREX Market Is A Goldmine
Learn about the FOREX market, where trillions of dollars are inconspicuously made and lost every single day
.: Top Currency Trading Articles
1). Electronic Currency Exchange: Trading Digots for a profitable living
First of all, if you're just finding out about electronic currency exchange trading, then probably you're still asking "what in the world does this electronic currency business is", and most importantly, "how do I make money from it?"
Well, you are reading this at the right time, because electronic currency exchange is a business that is expanding and offering new ways to profit from it.
2). Fibonacci Numbers and the Golden Ratio – 3 Tips for Greater Trading Profits
Support and resistance levels are an important consideration for most traders to help identify entry and exit points when trading. Fibonacci percentage "retracement" levels based upon the Fibonacci number sequence and golden ratio are very popular with many traders but what are they exactly?
3). How To Spot Forex Fraud
As the popularity of Forex increases so do the number of scam artists attempting to cash in on the Forex gravy train. Since Forex involves trading money internationally, often over the Internet, a whole new breed of scams have come about. Ironically many of these scam artists are finding their marks through newspaper, television or other print media advertisements.
4). Mechanical Trading systems – Spotting the Ones That Make Money!
Mechanical trading systems are, as you would expect, systems that make trading decisions for you. The thought of having mechanical trading systems you can simply use to generate automatic profits, is obviously very attractive to many traders.
5). A Profitable Forex Strategy
Copyright 2006 Timothy Rohrer
Making money in the forex market is not an easy task by any means. However, given a bit of education and knowledge of the market, it can become quite easy to profit in the forex market. Most traders end up learning that it’s the simply systems that create the wealth. Over analyzing and over thinking can sometimes affect your trading methods and strategy.
6). Hot Tips for Successful Online Forex Trading - Part 2
In the first article in this series, I passed on several tips to help you become a successful trader.
7). The Function of Money and its Future
Originally exchange took place without the use of money, by barter. Long before money had come into the commercial world people exchanged goods for goods. This system of barter made it possible to satisfy many wants that would otherwise have gone unsatisfied. Barter raised the standard of living, but under such a system the exchange of goods was greatly hampered.