In this article we will discuss basics currency trading of the
currency forex market. Forex can be a very interesting place. The alure
of fast profits and 24 hour trading has caused individual investors to
flock to the forex markets in record groves. This does not mean that
there is easy money to be had however. If the you thought the stock
market was filled with average corporations that made it tough for the
little man to make a buck, wait till you here about the forex. The
market cap is in the trillions on a regular basis. It dwarfs the stock
market by comparison. Average trades are in the millions and tens of
millions!
Deals on the forex market are done in lots of $100,000. Which means you will use lots of at least $1000 to control your $100,000 lots at 100:1 leverage. Forex moves in pips, which per dollar are hundreths of a cent. If you are controlling a $100,000 lot however. That equals $10. On days with important news or large economic events, the market can move hundreds of pips very quickly so you can see why this is a dangerous market. Here are some of the things you can do to make sure you do not loose your nest egg.
do your research and know the markets. Open a demo account to learn the ropes. Be careful, its addicting
stay in the kiddie pool until you are having long term successful trades. There is a learning curve like anything else
do constant research, you need to know the dates that important news like when gdp quarterlies are reported.
decide what kind of trader you are going to be. Technical or
Fundamental. Technical traders trade based of charts, graphs, and
trends, fundamental traders trade of news, economic events, reports, and
what they believe will happen to certain economies in the future. I
personally believe that a mixture is the best way to go so that you can
understand everything. You will have a better understanding of the
markets as a whole.
learn about macroeconomics. The basics of the currency exchange
fluctuation is based off the strength of a currency. Basically,
inflation, and government instability will cause a currency to go down.
On the other side, low inflation, and a strong government will cause a
currency to rise.
That is basics of it. Now get to it, and good luck.
Deals on the forex market are done in lots of $100,000. Which means you will use lots of at least $1000 to control your $100,000 lots at 100:1 leverage. Forex moves in pips, which per dollar are hundreths of a cent. If you are controlling a $100,000 lot however. That equals $10. On days with important news or large economic events, the market can move hundreds of pips very quickly so you can see why this is a dangerous market. Here are some of the things you can do to make sure you do not loose your nest egg.
