Finance - Forex Trading Strategies

Forex Trading Strategies by Gay Redmile

The world of trading and investment can be as frustrating as it
can be rewarding! And FOREX (Foreign Exchange) is no exception -
often described as risky, profitable and complicated.


Forex is the largest trading market in the world.

Forex is the worldwide market for buying and selling currencies.
These markets were developed to cater for the supply and demand
of different currencies by governments, companies and
individuals - for international trade and assisting importers
and exporters. Therefore those who trade in this market include
consumers, businesses, investors, speculators and the banking
industry.

Different countries use different currencies - which vary in
their values against each other. Forex trading invovles the
buying and selling of two currencies - trading pairs - you are
selling one and buying another eg you may use the US dollar to
purchase British pounds - if the supply of the pound lessens -
it will cost more dollars to buy pounds - the Forex trader hopes
to sell their pounds at a higher price than the purchase price.

A speculator in Forex is someone who accepts the possibility of
adverse exchange-rate movements in the hope of making a profit
from favourable movements in currency.

As a speculator you should always start trading with a small
amount and have a trading system - which tells you when to get
in and out of the market. It is a favourite option for currency
traders as you can trade the Forex market 24 hours per day and
the transaction costs are minimal.

This market - because of its sheer size - is hard to be
manipulated - which stocks can be - it is more likely to be
influenced by global news or events. Hence, the opportunity for
'insider trading' is eliminated.

However - beware -Forex brokers estimate that 90% of traders
lose their money; 5% break even and only 5% achieve profitable
results!


Article Source: Forex Trading Strategies