Get Started Now Trading in the Forex Market
Forex (or foreign exchange) is by far the largest financial marketplace in the world, averaging nearly $4 trillion per day. And it’s open 24 hours a day, Monday through Friday. You can trade for five straight days if you wanted. However, it’s a good idea to keep yourself in good physical and mental condition so you’re alert and your reflexes are sharp. It’s also the most competitive financial market in the world to trade, because you’re going head to head with major banks, multinational corporations and other traders who could be anywhere there’s an Internet connection and brokerage account availability.
It’s obviously not easy to succeed, but if you persevere and fight your way up the learning curve to consistent success, you can have an amazing lifestyle. Once you amass a large enough account of working capital, you can scale your trades as high as you like. In a $4 trillion marketplace, you don’t have to worry about getting filled, or even moving the market yourself by your trading activity. It’s too big.
However, it is a discipline as well as a science. It demands you function at the top of your game in all ways. The action in the currency markets is nonstop. It reflects not only the day-to-day ups and downs of ordinary economic transactions, but the major macro-economic moves by central banks all over the world. And it reflects political events as well because they affect the demand and supply of a country’s money supply. You of course need an effective trading system. You need to recognize setups for you to enter a trade, and the signals telling you to sell so you can take your profits or cut your losses before they grow larger. You will have losing trades, so you need the emotional resilience to understand losses are just part of the game. As long as you don’t allow them to wipe out your working capital, you’re still a trader. You’re just waiting for your next setup to enter a position. Choose the help of a professional broker such as crypto77.
You must understand the economic impact of political events. Sometimes that’s easy. When the Federal Reserve raises interest rates in the United States, that makes the US dollar more attractive relative to other currencies, so its value goes up. The European Union has been undergoing political and economic turmoil for years, but its direction is not always clear. If they allowed Greece to leave, would that help or hurt the euro? It’s not clear.
Large businesses drive most of the currency transactions, though everything is done through large banks. When somebody in the United States buys a new Toyota, they of course pay in US dollars. However, Toyota must exchange those dollars for yen to pay the workers in the plants in Japan.
You trade currencies by deciding one currency will go up in value relative to just one other currency. The currency you are bullish on goes on top of the fraction. Thus, if you take a position in USD/JPY your trade is going long the US dollar against the Japanese yen. If the yen then goes up in value against the dollar, you have a loss. There’s no actual going short. If you believe the yen will rise against the US dollar, you take a position in JPY/USD.
The quote you see is from your broker. They make the other side of all your trades because they obtain the actual money from the banks. Every major bank charges its own exchange rate. The broker’s platform assemble all these feeds, comes up with an average price, and charges you that amount.