Did you know this about currencies?
How online forex trading started
Currency trading or forex trading (FOReign EXchange) started around 1973. That's when the Bretton Woods system came to an end. Earlier, currencies trading were not very common. Online forex trading started around 2001, and has become even more popular.
Did you know this about currencies?
Currency Trading - an enormous market
The currency market is the largest financial market, with an average daily
trade volume of over $US 2 trillion. Forex Trading is about 3 times as large
as all markets for stocks and futures together.
Did you know this about currencies?
Currency market characteristics
In contradiction to many other financial markets, online forex trading does not
have any physical or central marketplace. Currencies are executed electronically
by banks, corporations and individuals that are trading one or more currency pairs.
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Trade forex - 24 hours a day
Between Monday and Friday, it's possible to trade online forex from
7 p.m GMT. The most active trade sessions are London, followed by New York and Tokyo.
The most traded currencies are EUR/USD, GBP/USD and USD/YEN.
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Big difference in forex spreads
A small currency, like the Canadian dollar (CAD), has a high spread
compared to USD/GBP. The trade volume is in general very high for the big currencies; dollar, euro, yen, pounds and swiss franc.
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Who trades forex?
There are two kinds of groups trading forex. About 5 % are from companies
and governments, buying and selling products in foreign currencies. The remaining
95 % are market players doing currency speculation or hedging.
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Online forex and technical analysis
There are many reasons why online forex trading works so well with technical analysis. For instance,
high daily trading volume, low spread and many forex traders use it for every single trade.
The most used currency trading indicators are ellioot wave, fibonacci, MACD och RSI.
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Possibillities with forex trading online
Forex trading can be used for many purposes. The most common might be to diversify
a portfolio, hedge an equity or currency position, or trading forex online purely for
speculative reasons - to earn money.
Did you know this about currencies?
Risks with online forex trading
The biggest risks with trading forex online are associated with the big opportunities. High leverage are the biggest threat. It's important to not over-leverage your currency positions. Make sure you always consider the risk-reward before entering a trade and always use sound money management.
Did you know this about currencies?
Currency pairs with high interest rates
A currency can be popular among forex traders if their central bank has a
relative high interest rate. Forex traders receive the interest rate difference
between two currencies, or have to pay if it is negative.
