- Jobs data continues to lift global equitiesLONDON (Reuters) - World stocks rose on Monday on hopes that the U.S. can avoid slipping back into recession, although the International Monetary Fund's chief economist warned of weak growth in both the United States and Europe. […]
- BP restarts sale of Alaskan assets: reportLONDON (Reuters) - BP has revived the sale of its Alaskan assets after failing to offload them to U.S. oil and gas company Apache in July, the Financial Times reported on Monday. […]
- Obama to announce $50 billion infrastructure job planWASHINGTON (Reuters) - President Barack Obama will announce on Monday a six-year plan to revamp the United States' road, railways and runways with a $50 billion up-front investment to jump-start job creation, the White House said. […]
- Russia's Medvedev forecasts early removal of grain banVORONEZH, Russia (Reuters) - President Dmitry Medvedev signaled on Monday Russia's ban on grain exports may be lifted earlier than December 31 this year and state grain stocks may be insufficient to cover the drought-hit country's needs. […]
- Hon Hai shares fall after reports on sales target cutTAIPEI (Reuters) - Shares in Hon Hai Group , maker of Apple's iPhones, fell as much as 4 percent on Monday after its chairman was quoted as saying in a report that the group will halve its long-term sales growth target to 15 percent annually. […]
Posts Tagged ‘Tokyo’
FOREX TRADING: August 07 09 Tokyo Live Room Update
Review of Forex Trades taken in the live trade room. Update on Forex Live Trade Room’s trial run.
Foreign Exchange Market: The Secrets Of Its Success
The foreign exchange market has many factors that make it unique. It has been described as the closest to pure competition that can exist, even though the international banks attempt to control and manipulate it. But what makes it so special, and why might you consider that you are more likely to be able to make money on the forex market than other forms of investment trading such as stock trading?
Trading Volume
The amount of money traded on the forex market daily is immense. The average daily turnover across the world is almost $4 trillion, according to a survey by the Bank For International Settlements in December 2007. The biggest trading center is London, followed by New York and Tokyo. However, the US dollar is the most traded currency.
Liquidity
The liquidity of a commodity is its ease of conversion to cash without impacting the value. Money is already money, so it is more liquid than any other asset. This means it is very easy to trade.
A Global Market
Forex is not traded in one place but all over the world. This means that, while of course it is affected by national events in the biggest financial powers, the effects are balanced out. Currencies do not have absolute value: a currency’s value can only be measured in comparison with another currency. So if one currency falls in value, another will rise.
Compare this with the stock exchange where it is possible for the value of every company’s stock to drop at the same time. All you can do in a major stock market crash is to withdraw your investment. But in forex, you can switch from the falling currency to the rising currency and still make money.
A 24 Hour Market
Currencies can be traded in different parts of the world 24 hours a day, five days a week. The foreign exchange market opens at 22.00 hours UTC Sunday in Sydney, Australia, where it is Monday morning, and closes at 22.00 hours UTC Friday in New York, where it is Friday afternoon. So whatever time of day or night you like to trade, you will have the opportunity, unless your only free time is on weekends.
Leverage
Leverage is where a small amount of something can be used to control a larger amount. In forex trading, leverage is related to the practice of trading on margin. You invest a small amount in your brokerage account and your broker lends you the rest, so that you do not have to put up the whole value of your position.
Forex trading offers more leverage than stock or futures trading. You may be able to control up to 200 times your account balance, depending on the broker. Higher leverage gives you the chance of bigger profits, but of course, there is also the risk of bigger losses. You will not necessarily want to take the maximum leverage on the foreign exchange market, especially in the beginning.