You may have heard of Forex but don't know exactly what it is.
Forex is short for foreign exchange - Forex trading therefore is
investing in, or speculating on, the exchange rate or the price of
national currencies. Just as an investor might trade shares,
commodities, and government or corporate bonds, an investor can make
informed guesses about the price fluctuations of foreign currencies.
The global Forex markets consist of the currency of every country,
and are traded 24 hours a day, 5 days a week. Forex traders can operate
from anywhere, even from home. The busiest time for Forex trading is
when the USA session is just opening and the European session is
closing, which is between 13:00 and 17:00 GMT. Currency prices move up
and down very quickly during this time, which creates both opportunities
and risks.
The fundamentals of Forex are not complicated: You buy a currency
when it's low, sell when it's high, and take a profit. You can also make
a profit by selling high and then buying low. This is called short
selling. It takes time and practice to learn how to predict fluctuations
in currency values and become successful in Forex trading. Many
indicators can affect the price of a particular currency in relation to
its value against other currencies - from national economic outlook to
political change. A succesful Forex trader learns how to read these
indicators. Traders have tons of educational material available on the
web to develop their knowledge - check out the rest of the Admiral
Markets' education section.
Forex is usually regarded as high risk for private investors but in
the current economic climate it is becoming a more attractive option.
Forex is not for the faint of heart but a skilled investor with the
right tools and the right knowledge can be successful.
Forex has built-in advantages over other types of investment. In the
Forex market, an investor can gear up or “leverage” in a way that is not
possible in most other asset classes.
Think about buying a house. Generally, you may put down between 10 to
20 per cent of the overall price of the house. The rest of the money
you borrow from the bank. Suppose you buy a house worth $100,000. You
put down $20,000 and borrow the rest from the bank. Then suppose the
price of that house goes up to $120,000 in six months, which is very
possible in a rising market. You can then sell the house and double your
money.
Forex works in the same way - and even more so: With foreign exchange
you can control sums of money up to 500 times larger than your initial
investment.
Forex has additional advantages over other types of financial
instruments. Investors can enter the market with much smaller amounts of
money, can sell out easily, and can short sell.
In the European Union, Forex is closely monitored and tightly
regulated. The retail Forex market has grown rapidly in the past few
years and it is the fastest growing financial area. One of the reasons
for this fast growth ist the software that has revolutionized the
industry in the past few years. Nowadays it is easier to execute trades -
everyone who has access to the internet can buy and sell currencies
within seconds at any time, in any place.
Video Tutorials
Free Education Collected from http://www.admiralmarkets.com/education/what-is-forex/
