Forex Market: Where the World Comes to Trade Currency

Forex market, currency tradingDid you know that you too can play the exciting game of international currency trade on a little multi-trillion dollar daily volume market called the Forex (Foreign Exchange) market? With nothing more than an Internet connection and as little as $50, you can log onto your currency trading account and stand elbow to elbow at the trading desk with banks, national governments, and George Soros. Actually, at the $50 level you won’t be trading with the Big Boys. Chances are your tiny account will be stuck in a bucket shop and never actually traded on the open market. More likely it will be held by the broker until your rank inexperience causes you to blow up your account and you’re done for the day.

But perhaps an unintended consequence of following the Forex market for any length of time is that your horizons begin to expand as you realize that, even though the American dollar is the world’s reserve currency, there are plenty of other countries that do just fine with their own monetary system. There are the ones you know like the euro, dollar, pound, and yen, but don’t overlook the lesser known dram, florin, real, peso, krone, rupee, dinar, sheqel, shilling, loonie, rand, and more.

The Forex market dwarfs all other trading markets combined. Wall Street and cronies don’t even come close. Another thing to keep in mind before leaping into the currency trading fray is that this international forum is much less regulated than stock or bond markets. It’s actually pretty wide open and free from regulation, which is a good thing except when it’s bad. What that means is be very careful whom you choose as your broker. Brokers registered in the United States, and a few other countries, are required to be a member of an oversight group. Other legitimate brokers join because they are doing business above board and want everyone to know it.

You can trade currencies around the clock on the Forex market, though there are three particular times of day when most of the trading is done: market open in Japan, market open in London, and market open in New York. The rest of the time can be pretty slim pickings and hard to enter and exit positions due to low volume. What else could a currency trader new to the game possibly need to know before deciding to test the waters? Oh yes. How to trade profitably would be nice. There’s no dearth of information available online. When you find a system that works, please let us know.

The American Monetary Association

American Monetary Association

Flickr / epSos.de

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