Author: Scott Martin
So you want to learn how to master forex? First of all let's have a look at what foreign exchange actually is. Most people understand the idea of "the money in our wallets" right at this moment. We know that the US dollar changes in value daily, and that other countries monetary units may be faring better or worse in trading than ours - some consistently better. Many people think they have a basic understanding of the stock market and forex currency trading, but do they really understand the differences. Currency trading can be a viable part of a diversified stock portfolio, but you must understand that there are differences between it and other stock trading. You will need to learn currency trading strategies and also work with currency trading charts. Becoming a successful FX trader is a fun and exciting journey. Put in the hard work and you will be blessed with huge profits.
Currency trading is not done in the same way that stocks are - in fact there are a number of differences. There is no regulated exchange for currency trading, nor is there a governing body. This eliminates arbitration in the event of a currency trade dispute, and most trades are based on credit agreements. When you learn currency trading you will understand the concept of buying one currency and selling another at the same time. For instance if you thought the US dollar was going to be strong against the Australian Dollar then you could take advantage of this buy buying the USDAUD pair. Fx currency trading is no harder than normal trading you simply need to get used to the terminology.
This 'buy and sell' arrangement might actually be more fair and equitable than the more structured stock market in a way because the currency traders must rely on each other to make their trades. They count on each other for trading activity as they compete against and cooperate with each other everyday. The great thing about forex trading is that unlike a stock it can't go to zero. Unless you are in Zimbabwe where hyper inflation occurred and it basically went to zero. This is a very rare occurrence and to be honest most currency traders would have made a huge profit from this. The people that it effects negatively are the people living in Zimbabwe.
One other key difference between currency trading and traditional stock trading is the ability to capitalize on information heard during conversations with business contacts. In the open stock market, such information would be considered "insider trading," and sharing it is viewed as a major, prosecutable crime. In currency trading, there is no such rule preventing you from taking advantage of newly discovered facts. In fact, in foreign exchange trading, such facts that would be considered "insider trading" in any other market are often leaked to currency traders days before the information is made public knowledge. This makes fx currency trading a hugely profitable business.
With Foreign exchange currency day trading and long term trading can be done it simply depends on the current market situation. Just like the stock market there will always be long term and short term opportunities - Its your job to take advantage of them.
Stocks are generally traded through a broker who makes a healthy commission on each trade. Currency markets do not use commissions, so the investor must be made aware of that fact. For this very fact, currency trading might not be the wisest choice for the novice or beginner trader. In saying this you still trade forex though a online platform or broker. Start your portfolio with some solid standing stocks while working with a broker, and then slowly start diversifying after gaining some market knowledge and some basic financial education. Once you are ready for currency trading, know the same simple rules that apply to all trades: know your market, know your limits and understand the risks involved.
So is it possible to make a living only trading forex? Absolutely - You simply need to get great signals, build your knowledge and use a high grade forex trading system.
About the Author:
Would you like to learn how to earn 30% per week? LEARN HOW TO MASTER FOREX from a trading professional. Every day investors are doubling their money within weeks using this amazing Currency Trading Strategy . Don't waste your money on managed funds anymore - Take control of your financial future today!
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