1. What is FOREX global trading?
FOREX stands for Foreign Exchange Market. It is based on an international marketplace where
currencies are bought and sold. Only the participants in the FOREX market determine the price
of one currency against another. In other words, the prices of currencies are based upon
supply and demand. This is similar to the idea behind stock price determinations. The
difference? Well you could call it a difference, but I call it an advantage. Currency prices
can not be affected by large buyers in the FOREX marketplace. In the traditional stock
market, when stocks are bought up by institutional buyers, stock prices fluctuate. This is
not a factor in the FOREX global trading market place because it is the largest liquid
financial market available. Between 1 and 1.5 Trillion dollars are traded everyday in the
FOREX market. It's impossible for an institutional buyer to make a splash. This is a huge
advantage for the "little guy" who doesn't have a huge budget. If you take the time to learn
how to play the FOREX game, anyone can make a fortune. Success is based on following the
rules of the market and knowing the signs to look for.
2. How does FOREX global trading work?
Currency transactions do not take place on a centralized exchange like the NYSE. It's a
global market and therefore trades take place all over the world through telecommunications.
You can trade on the FOREX global market 24 hours a day from Sunday afternoon untill friday
afternoon. For GMT time, this is translated to 12am on Monday to 10:00pm on Friday. The
process is a fairly simple one. You buy and sell currencies through dealers. The link I
provide at the bottom of the article will steer you in the right direction for finding a
qualified dealer. Think of a dealer as a broker. The dealers provide quotes for all major
currencies and you decide which currently is a sound investment at any given time. A big
advantage to working with dealers in FOREX global trading is the ability to obtain a line of
credit off of a very small initial rate. You can get a line of credit off of a $500 payment
with many dealers. This leverages your ability for huge gains in the FOREX marketplace. The
tactic is called marginal trading, and although it can be risky, once you know how to play the
game it is the ideal way to "take the house's money". The appeal of marginal trading is that
investments can be made with relatively small startup capital. You don't need a big money
supply to be a big winner in the FOREX global trading business. This also allows for bigger
investments to be made with fewer money transfer costs.
Marginal trading is broken up into "lots". A "lot" is an amount close to $100,000 that can be
financed with as little money as .5% down. This means for $500 you can leverage a $100,000
investment. - WOW! That is buying power. Unlike traditional investment methods like flipping
real estate, it doesn't take time to build up your wealth. You can leverage your money to
grow as quickly as you feel comfortable growing.
3. What are some investment strategies for FOREX global trading?
The investment strategies for FOREX trading don't differ too much from tradition stock market
trading. Strategies are categorized into two divisions - Fundamental Analysis and Technical
Analysis.
Funamental Analysis will look at a particular regions currency and take into consideration
such things as their countries economy, their bank's current interest rate, inflation rates,
unemployment levels and a host of other factors. It is important to keep in mind that any
anticipations based on fundamental analysis, should be considered against the perceptions of
other investors in the FOREX marketplace. Afterall, it is more than likely that the current
currency price reflects all perceived knowledge of a country's economical situation.
Technical Analysis is based on graph reading and interpreting signals from financial statistics. The link I give at the bottom of this article gives great insight into this strategy of investing in the FOREX global market. I personally am a big believer in Technical Analysis over Fundamental Analysis. Numbers are open to only so much interpretation and perception. Technical Analysis is a much more black and white way for many investors to choose their winners in the FOREX global market. This is solely my opinion. You can read on through my link below for a far more granular, in depth look at numerous strategies that work and the most efficient ways to employ them.
Again, Congratulations on embarking on one of the most financially rewarding paths you may
have ever found. There is a fortune to gain in the FOREX global market. The most prudent
advice I can give you is to keep learning until you can't learn any more. It's a smarter,
more efficient way to build youself up to financial freedom while trading in the FOREX global
market. Don't go into the marketplace blind. Gain the insight that will reward you tenfold by
continuing your FOREX global trading education. I wish you all the success in the world.
