Candlestick Trading Blog
June 23, 2009
Trading Forex Online
| Trading forex online is a great way that many investors make money and there is a lot of information that you should know before you begin to trade forex. Forex, also referred to as FX, is the market in which currencies are traded and it is the most liquid and the largest market in the world. It is estimated that the total average traded value is more than $1.9 trillion per day. The forex market is open 24 hours per day, five days per week where currencies are traded worldwide. The major financial centers are London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney. There are generally three types of forex traders including short-term traders, medium-term traders, and long-term traders. We describe each type of trader below. Short-Term Traders – These traders, also known as scalpers or day traders, practice trading forex online by taking advantage of small price movements with a large amount of leverage. These traders will open and close trades within minutes and there is either quick profits or losses when forex trading. This type of FX trading is risky in that it requires large capital due to the amount of leverage required to make a profit from such small price movements. Medium-Term Traders – These traders, also known as swing traders, typically hold their positions for one or more days. These traders require lower capital than with day trading because leverage is typically only necessary to increase profits. Long-Term Traders – These traders hold positions for months and even years and they base their decisions of fundamental analysis. (Short and medium-term traders base their decisions on technical analysis). Long-term traders require large capital in order to cover volatile movements against their open positions. When learning about trading forex online you must know that currency is traded in pairs. The value of currency is determined by the comparison to another currency. When trading currency, this currency pair tells the trader how much of the quote currency is needed in order to purchase one unit of the base currency. The base currency is the first currency that is quoted in the currency pair when currency trading. It is also the considered the domestic currency that will be used to determine profits and losses. It is for this reason that it is also referred to as the primary currency. For example, if you were looking at the USD/CAD currency pair, the US dollar would be the base currency and the Canadian dollar would be the quote currency. There is a lot more to learn about when trading forex online. Continue your forex trading education and determine if it is the right market for you. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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