Forex trading is a topic that I have seen come up across the financial space quite a lot lately. Forex (the foreign exchange market) is an exciting financial market where currencies around the world are traded.
Forex trading is so popular that over $3 trillion worth of currency is traded each and every single day. That is a lot!
A simple explanation of the foreign exchange market.
Foreign exchange trading is when trading is done for currency values. From ETX Capital‘s website:
Currency exchange rates, such as the worth of Sterling relative to the Dollar or the Euro to the Yen, change on a constant basis, as money markets react to world events. Examples of circumstances that can influence Forex rates include the release of macroeconomic figures, geopolitical crises, shifts in Central Bank policy and the rise or fall of financial indices. The potential for rapid volatility in the global currency markets means that Forex is an exciting, fast-paced method of trading.
Trading on leverage in the foreign exchange market.
Trading in the foreign exchange market also entails that you trade on leverage. This is very similar to spread betting in that you can start trading in forex with very little money down with the potential to make more money in the foreign exchange market.
Like spread betting though, this can bite you in the butt if you do not do your research though, in that your losses can be magnified as well because you will be trading on leverage as well.
One great thing about the foreign exchange market.
One factor that many people love about the foreign exchange market is that you can trade forex all day long – 24 hours a day. This is a great thing as you are not limited to the normal time frame of other financial markets. You can trade all day long.
Forex trading tips.
The foreign exchange market can be a fun market to trade in. With that being said though, you should be safe. Some of my tips for forex trading is that you do your as much research as you can. You should research the different curencies, what impacts currencies, and so on. Become an expert in it if you have the time! 🙂
Are you interested in trading in the foreign exchange market? Why or why not?