subject: 5 Ways to Make Sense of Currencies Trading by:John H, Anderson [print this page] I think it is about time that somebody started a trend to write simple articles about the Forex market for the new investors out there because the last thing they need is technical jargon and trumped up descriptions that will leave them breathless with optimism yet floundering in the water of what to make out of.
The market is a volatile, membranous network of information that you can easily get tangled in and from the get go, I will tell you that this article has nowhere enough space to detail every little thing about the Forex market; but it will explain certain things that make the market what it is today.
You see, the paper trade is a very distinct one and investors either love it or hate it. Alot of people will talk about how the Forex market is one of the most liquid markets in the world, and that is the truth. When we speak about how liquid or marker liquidity, in essence it is how little barriers of bureaucracy there are in between the point of decision making and action. For example, if you decide to pull out of the market and liquidate all you investments because you see the market movement as going the opposite direction; which also means if you want to pull out because things are going bad, it should be within moments as you speak to the broker. In other more traditional markets, there are processes and administrative procedures that must be followed in order for your decisions to be translated into action.
However, in the Forex market, this is not the case and the primary reason why more and more investors are flocking to this. Of course on the downside of this, you need to be extremely reactive, you need to be able to read the market on a step by step basis, from moment to moment, from price change to price change. Another term people might be throwing out is that Forex is a 'zero sum game', which essentially means that when you win, there will be some one that loses. Once a currency goes up, one currency will slow down in response to it and this is because you are playing two currencies against one another.
What about the over the counter nature of the market? This means that transactions occur in real time, you do not need to wait; it leads back to the liquidity of the market. What about terms like the swap or day trade or even hedge trading? These are just methods of trading that you can employ; so learn about each and every characteristic and decide which one suits you the best. Last but not least, the 5th thing you might hear about is Forex systems.
These are ways to make money as detailed by investor experts, and they are sold widely on the internet. Use some discretion and research before buying one. So these are 5 ways to make sense of currencies trading.
About the author
John H. Anderson is a specialist in Forex Trading with more than a decade of experience. He owns Trade-currency.org where he provides his Forex Trading Review
