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Thursday, August 27, 2009

Currency Trading

By Paul Bryant

Forex currency trading or simply Forex trading is the trading of foreign currencies against each other. Every Forex trade which takes place results in buying of one currency and selling of another currency simultaneously.

Here one countrys currency is being purchased by that of another and the traders do so by particular price negotiations known as the exchange rate and the entire transaction is called Forex transaction.

Forex trading is the backbone of all the international capital transactions worldwide. Being the largest trading market in terms of trading volume it is estimated that about $1.5 trillion USD worth of transaction takes place every single day.

Present data shows that stock market trading has been surpassed by Forex trading not only in terms of volume but also in terms of popularity. With huge profits being generated in a short time the Forex trading business is by far the most potential business. The main fact is that even minor currency movements leads to accumulating reasonable profit on the trade which seems to be more profitable when comparisons are drawn among all the trading markets.

The trading throughout the world varies with respect to place and time and with respect to the daily working hours the market timings vary from place to place. Forex trading begins every Sunday at 7pm in the evening New York time, as the markets open for the week in Tokyo located in the easternmost part of the world. Next in line to open the markets is the Hong Kong and Singapore markets followed by the European markets. Last in line to follow is London and trading takes place throughout the world.

Now why are currencies being traded? Well, generally speaking they are done to meet purposes like hedging and also to build up the speculation. Every trader, whether they are individual traders or corporate agencies or financial institutions, trade foreign currencies for diverse reasons. But whatever the reason may be, Forex trading is surely a good podium for the investors.

Speculative markets are best suited for Forex trading. More and more traders are investing into Forex these days with the Forex markets growing to about 50 times the size of the all other market transactions put together. USD, EUR, JPY, GBP, CHF, CAD, and the AUD are among the most commonly traded currencies of the world.

There is just no slippage of the market price in Forex trading no matter what the magnitude of the buy and sell orders are. Every trader has the liberty to take the better of both upward and downward trends, which surely raises the margin of profit potential. Forex trading has come to a status of being singled out as the most efficient markets in the world and there is no reason why one shouldnt agree to that! - 23212

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