Forex investment is conducted in a currency market. This is a decentralized global market specifically designed for trading currencies. Strategy wise, Russ Horn is bringing out a new system soon that is set to be very good. Have a look at my forex strategy master review. Larger international banks are the major participants in the market. There exist various financial centers over the world which act as trading anchors between a range of various sellers and buyers around the clock but excluding weekends. Values of various currencies are determined by the forex market. Reuter dealing 3000 and EBS is a major interbank forex trading platform.
Forex trading is simpler when you are familiar with equity trading. Foreign exchange is the most traded asset and commodity all over the world. It is also the most liquid traded asset. This means that for you to earn a profit while trading, you must have a large amount of capital. The foreign exchange market is risky and at the same time unique. It is because of the margin level provided by majority of forex brokers and also the capital required in large amounts.
Ensure that you are familiar with the manner in which the currency is quoted. Price quotes are provided in pairs. In the pair, the first currency is the transaction currency and the second is the payment currency. With the quote, the trader is able to understand the number of units of payment currency needed so as to buy a unit of the other transaction currency.
You should make sure that you understand how currency prices are moving. The currency prices move similarly as most assets. For example, if GBP/USD is 1.9000, it implies that a unit of Great Britain Sterling Pound is equivalent to 1.9000 US dollars. When the price moves to 1.9090, it shows that the sterling pound is strengthening against the US dollar. However, when the price moves down to 1.8100 it means that the sterling pound is weakening against the US dollars.
You must review major or hard currencies being traded. They include the EUR/USD, USD/JPY, USD/GBP, USD/CHF, USD/CAD and USD/AUD where EUR- Euro, USD- US dollar, JPY-Japanese Yen, CHF-Swiss franc, AUD- Australian dollars and CAD- Canadian dollars.
After that, get a broker of your choice. While looking for offer and sell price or mostly called bid and ask price, select the one with a low spread or a small difference between them. A quality broker should be registered with relevant regulatory authorities’ such as (CFTC) Commodity Futures Trading Commission and (FCM) Futures Commission Merchant and also a set of tools offering. The research and tools exhibited in the program should be tested using free demo.
Most of the foreign exchange traders use a combination of both charting and fundamental analysis. However, most traders prefer technical analysis than fundamental one. Basically, fundamental analysis bases on forward looking indicators so as to predict long term trends. They may include (PMI) purchasing managers’ index and nonfarm payroll. Tools such as moving averages, pivot points, Fibonacci studies and Eliot waves are used in technical analysis so as traders are able to make decisions either to exit or enter trade.
When starting, use a demo account. When starting I can also recommend forex strategy master. Get a forex strategy master bonus discount here. It will be helpful for you to understand two important aspects before you embark on investment. You should always make sure that emotions are not transferred in trade and your friend should be the trend of the market.