Forex currency trading
is someone like buying and selling stocks but much more like trading
the commodities futures market. When you buy stocks you actually own
something. However, when you invest in the Forex currency market you are
actually not taking ownership of a tangible product. The question is;
is possible for ordinary people to make money doing this? In this
article, we will examine this question.
Except for a period of time between Friday night and Sunday night each
week, the Forex market is open all day and all night every day. The
Forex market has more trades executed than all the commodities markets
and stock markets all put together. In other words, the Forex market is
huge. Because of its enormous size liquidity is never a problem. In
other words if you want to buy or sell a currency pair at the market
price, you can always do so immediately.
What do you trade when you are trading the Forex market? Trades in the
Forex market always involve buying one country's currency and paying for
it using another country's currency. In other words, you can buy
British pounds with Japanese yen. You can also buy Euros with Swiss
francs or US dollars with Canadian dollars just to mention a few of the
trades you can make.
The currency trades are always listed with the type of currencies you
are buying first followed by a /and the type of currencies you are
buying that currency with. So, Forex market currency pairs look like
this: GBP/JPY. This means you're buying Great Britain pounds with
Japanese yens. The most common trade on the currency market is buying
Euros with United States dollars. On a Forex board this would look like
the following: EUR/USD. If you live in the United States where you
normally buy and sell things using United States dollars, trading this
pairs a natural because you know immediately without doing any math how
many dollars you have gained or lost on the trade.
As well as buying currency pairs, you can also sell these pairs. In
other words, you can sell Euros and receive United States dollars for
doing so. After a certain amount of time you must buy back the Euros. If
at the time you buy them back they have lost value, you will have made
money. If they have gone up in value you will have lost money.
All this does not answer the question of whether or not you can make
money trading on the Forex if you're just a regular Joe. The answer to
the question is a resounding yes. However, it is not child's play!
Trading the Forex market is very serious business and if you don't know
what you're doing you can get badly burned or, possibly even lose
everything!
The moral of the story is; make sure you study hard and make sure you
have the advice of some very knowledgeable Forex experts before you
venture into the field of trading the Forex market. Also, make sure you
manage your risk wisely and make sure you are apprised of the risks
involved. Still, by following these rules it is very possible to be on
the winning side of many trades. However, do not be caught up in the
hype that the Forex market is easy pickings.
