Trading has been with us for thousands of years and we’ve come a long way from basic bartering, which people engaged in before the creation of money and since the arrival and subsequent development of the World Wide Web, online commodities trading allows traders to enter global markets and make real-time trades.
What is Forex?
Forex is the trading of foreign currencies on a global currency platform; typically, traders select a pair of currencies and predict their values over a specific time period. The currency trading platform is global and by using an established Forex broker, you can make good use of their state-of-the-art software and analytical tools. The system allows traders to buy and sell currencies without having to physically possess the currencies and much like and other forms of trading, you need to do some serious research.
Currency trading example
Let’s take an example; a UK trader thinks that the GPB will strengthen against the US dollar, which is called a GBP/USD trade. If the trader predicts correctly, he or she makes a profit on the trade, if, on the other hand, the GPB weakens against the US dollar, the trader will suffer a loss.
What are CFDs?
These are contracts for differences, which are contracts between traders and brokers and the value of a CFD contract is not the value of the currency, rather it is the difference between buying and selling price when the contract is closed.
Forex Market
The Forex market is open 5 days a week, 24 hours a day, so you can enjoy your weekends, knowing the markets are closed. If you want real-time trading access to Forex, you need to register with a top international broker, where you can make good use of the best learning resources and powerful analytical tools. All the support you need is there if you register with a leading FX broker.
Demo accounts
Every new trader should trade with a demo account (not using real money) and if they are ahead of the game after 3 months, create a real trading account and enter the currency exchange arena where you trade pairs of currencies in real-time. There is a lot of learning to be done if you are serious about becoming a profitable Forex trader and your broker is by far the most important connection you need.
The importance of analytics
Whether going long or short, trading is all about buying low and selling high and if you can that magic line, you will be laughing all the way to the bank. There are so many variables that can affect a currency’s value and it is not easy to predict rates, which is where analytics software comes into play.
Like most things, the more you put into learning about FX trading, the more chance of success and with the help of an established FX broker, the sky is the limit.