Currency Trading Online - Great Reward And Risk
Currencies traded online: A vast variety of currencies are traded online depending mainly upon the software you choose to use. In general the most liquid currency pairs worldwide are your best choice, these include US Dollar/Yen, Euro/UD Dollar, GBP/US Dollar, US Dollar/ Can Dollar, US Dollar/ Franc and Australian Dollar/ US Dollar.
Calculate rate: The interface or software you use will have trade rate calculators. Make sure it is in real-time value. In case there is no calculator the following formula can be used to determine the rate Y-to-X exchange rate =1/ X-to-Y exchange rate.
Advantages to online: In general the forex markets are very liquid and to have access to these markets by the mere click of a button makes trading much more attractive. Loss strategies and order limits can also be set. Leveraging opens the door to great profit possibilities while keeping risk limited. Profits can also be made in even bear markets with use of short and long positions depending on pair value. The greatest advantage by far is the twenty-four hour, seven day a week online access.
Con's to online: Understanding and a proper knowledge of foreign currency markets is key to trade success. Have a strategy or set plan and stick to it. If you have tendency to be an impulsive buyer or seller it's recommended that you rather leave this market type alone. Volatility that comes with liquidity is a huge disadvantage as significant moves happen daily, making prices very sensitive. Be prepared to possibly loose any profit as well as initial cash contributions. The possible risk and rewards must be well balanced. Just as leverage can work to your advantage it can also work against you with margin calls occurring when risk to high for the account size.
Realistic risks: You should realise that risk is very real. These markets are over-the-counter and spot foreign exchange transactions. You will trade directly with counter-parties as no clearing houses are involved thus there is no guarantees on this already risky market. Speculation is the main purpose of forex markets. There is a possibility of losing your total cash balance if a only small move happens in the market. - 23221
Calculate rate: The interface or software you use will have trade rate calculators. Make sure it is in real-time value. In case there is no calculator the following formula can be used to determine the rate Y-to-X exchange rate =1/ X-to-Y exchange rate.
Advantages to online: In general the forex markets are very liquid and to have access to these markets by the mere click of a button makes trading much more attractive. Loss strategies and order limits can also be set. Leveraging opens the door to great profit possibilities while keeping risk limited. Profits can also be made in even bear markets with use of short and long positions depending on pair value. The greatest advantage by far is the twenty-four hour, seven day a week online access.
Con's to online: Understanding and a proper knowledge of foreign currency markets is key to trade success. Have a strategy or set plan and stick to it. If you have tendency to be an impulsive buyer or seller it's recommended that you rather leave this market type alone. Volatility that comes with liquidity is a huge disadvantage as significant moves happen daily, making prices very sensitive. Be prepared to possibly loose any profit as well as initial cash contributions. The possible risk and rewards must be well balanced. Just as leverage can work to your advantage it can also work against you with margin calls occurring when risk to high for the account size.
Realistic risks: You should realise that risk is very real. These markets are over-the-counter and spot foreign exchange transactions. You will trade directly with counter-parties as no clearing houses are involved thus there is no guarantees on this already risky market. Speculation is the main purpose of forex markets. There is a possibility of losing your total cash balance if a only small move happens in the market. - 23221
About the Author:
Be certain to check out John Eather's free ecourse and reports about Online Forex Trading. Receive the most up-to-date info concerning forex trading. Go to MoneyMakingFxTrader.com for all the details.
posted by X - Men @ 3:07 AM
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