Understanding the fundamentals of Forex Trading will help you make a lot of cash in the FX trading market. There are some things that you can do now that will help you gain money. So, what I’m going to do is share some basics of Forex trading. That way, you will be able to make a ton of cash in the FX market.
In a Forex trading venture, the foreknowledge and preparation are the keys to success. Without this, the attempt to make a profitable financial decision can end up in disaster and failure, regardless of your level of confidence and motivation or the amount of money that you planned to invest. Those who were successful in the FX trading market have gone through a trading course to gain the skills and knowledge needed to successfully trade in this large liquid and financial market.
Where is the Forex Market Located?
Forex is not centralized exchange as like Stock and futures market. It is considered interbank market or Over the Counter since transactions are done via telephone or any other electronic network.
Who are the participants in FX Market?
The FX or Forex market has been ruled by Central banks, investment banks & other financial institutions. There has been an addition of money managers, money brokers, traders, MNCs that has increases the percentage of players in the FX Market.
When is the Forex market open for trading?
Open for Trading? Forex is a 24 hour market. The Day for trading starts at Sydney, then leads to Tokyo, London & finally end at New York. The other market is not running round the clock, they have fixed business hours.
Is trading in FX Market expensive?
Well, the answer is a straight No. One can start trading with as low as $250 allowed by most of the brokers.
Define Margin?
Margin in FX Market allows the traders to handle he leverage by a small fraction of the necessary equity that is required to fund the trade. The usual margin allowed in equity market is 50% that enables the investor to have doubled the buying power. Leverage has a range of 1 to 2 % in the Forex market that gives the investors perform active trade.
Explain,’long’ or ’short’ position?
When a trader buys currency at one cost & sells to other at higher price, such situation is called long position. Here the investor benefits a lot due to the rising market. On the other hand, a short position arises when the trader. Sells the currency assuming that it will come down in the future. Here too the investor gets some benefit. In a Forex cycle, every investor passes through the phase of long and short position.
Explain the difference between Overnight position and intraday?
Overnight positions are arisen at the end of trading time & this is normally rolled over to the next trading day by the Forex broker based on the price. Intraday positions arise any time at the opening or closing during any normal trading day.
How to we determine the currency prices?
Varies Economic or political conditions, inflation, interest rates affect the currency prices of a country. Even the government also tries to create an impact on the currency value by flooding the FX market with a lot of domestic currencies that will lead to lowering the price. Such states cause high volatile market.
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