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.
Rate Formula: Most programmes, software and interfaces come with trade rate calculators. Remember to check that the calculators take real-time values in consideration. However should you want to calculate the rates on your own the following formula is used 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.
Disadvantages to online: To be successful in the foreign currency markets, you have to have a good knowledge and understanding of the market type. Do not be an impulsive buyer and seller, have a strategy or plan and follow it to a t. Do not transact with funds you do not have or are willing to possibly loose. Volatility is the greatest disadvantage. Your risk and reward must balance. Significant moves occur everyday in this market making prices extremely sensitive. Leverage can also work against you with margin calls taking place when risk is too high for your account size.
Be realistic: If you are realistic with your possible rewards and risks you will be an excellent trader. The fact that transactions are conducted spot, over-the-counter make them loose cannons. You work directly with possibly more experienced counter parties with no protection from clearing houses or brokers. Due to the skipping of clearing houses, no guarantees of delivery and payment are furnished. The purpose mainly for forex markets are to speculate, thus trader buy and sell at an extremely fast pace with only profits in mind. Possibility of total cash balance loss is very real, with the smallest of movement in the market. - 23212
Rate Formula: Most programmes, software and interfaces come with trade rate calculators. Remember to check that the calculators take real-time values in consideration. However should you want to calculate the rates on your own the following formula is used 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.
Disadvantages to online: To be successful in the foreign currency markets, you have to have a good knowledge and understanding of the market type. Do not be an impulsive buyer and seller, have a strategy or plan and follow it to a t. Do not transact with funds you do not have or are willing to possibly loose. Volatility is the greatest disadvantage. Your risk and reward must balance. Significant moves occur everyday in this market making prices extremely sensitive. Leverage can also work against you with margin calls taking place when risk is too high for your account size.
Be realistic: If you are realistic with your possible rewards and risks you will be an excellent trader. The fact that transactions are conducted spot, over-the-counter make them loose cannons. You work directly with possibly more experienced counter parties with no protection from clearing houses or brokers. Due to the skipping of clearing houses, no guarantees of delivery and payment are furnished. The purpose mainly for forex markets are to speculate, thus trader buy and sell at an extremely fast pace with only profits in mind. Possibility of total cash balance loss is very real, with the smallest of movement in the market. - 23212
About the Author:
Make sure to check out John Eather's free ecourse and reports about Online Forex Trading. Get the most up-to-date information concerning forex trading. Go to MoneyMakingFxTrader.com to learn more.
posted by X - Men @ 3:22 AM
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