Forex market is a relatively new market, being started in
the 1970s. However, despite its newness, it is today the
largest market in the world, worth more than a trillion
dollars a day. That means that a lot of money is going
through the channels, and it is open for anyone who wants a
piece of the action. While it may be intimidating at first
to enter a market of that size, there are still many
advantages for investing in the Forex.
Firstly, because of its size, you will never be stuck with
stock that you cannot sell. There will always be a buyer for
whatever you have, and chances are that your trash is some
one else's gold. In addition, the Forex is accessible 24
hours a day, seven days a week. This means that you will be
able to make trades at all hours, since there are Forex
traders in ever time zone, and this adds to the liquidity of
the stock. But perhaps the best thing about the Forex is
that most of the transactions are done online, with all the
comfort and ease that that entails. An internet Forex trader
does not need to meet his broker in order to make trades.
the term commonly used to describe Foreign Exchange Trading
a financial market which can provide very high returns if
you know what your doing and very high losses if you don't.
Most of the terminology used when trading FOREX is the same
as that used in most of the other world financial markets
heres some examples and few of the terms are unique to
foreign exchange trading.
PIP - Whats a PIP? PIP stands for Price Increment Point and
is the smallest unit of trading in FOREX how much a PIP is
worth depends the leverage on your FOREX Account and your
FOREX - Whats FOREX? FOREX stands for FOReign EXchange, and
is the trading of one currency pair against another.
SPREAD - What is the spread? The point or pip difference
between the ask and bid price of a currency pair, spread is
how forex brokers make they're money.
ASK - What does ask mean when trading? The ASK price is the
price at which you can buy units or PIPS of whatever it is
your trading for.
BID - What does bid mean when trading? The BID price how
much you can sell for in your chosen market.
BULL - To buy stocks, shares or whatever. You would be a
bull if you beleived what ever you were trading was going to
increase in value. With share trading nearly all investors
are Bulls they buy, FOREX however is differnt most FOREX
Investors both buy and sell in fact whenever you buy a
curency pair your selling another.
BEAR - To sell you would be a bear if you beleived what ever
you were trading was going to fall in value.
Leverage - What does leverage mean when trading? The ability
to control large volume of a commodity with a comparatively
small amount of capital. Leverage is what enables small
investors to participate in markets such as forex, without
leverage you would need a lot of risk capital.
Risk Capital - What is risk capital? Money that you can
afford to lose.
How can I make Money from FOREX?
You can make money from FOREX by buying or selling one
currency pair against another, you can however also lose a
lot of Money. Making money from FOREX is like making money
money by any other method it takes practice loads and loads
of practice, their are many different methods and ways of
trading you need to find a style you are comfortable with
set up a practice account and study the market see what
fundamental announcements have the greatest impact.
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