Wednesday, September 30, 2009
Thinking of trying your Luck in the Forex Market
The Foreign Exchange market, also referred to as the "FOREX" or "Forex" or "Retail forex" or “FX” or "Spot FX" or just "Spot" is the largest financial market in the world, with a volume of over $2 trillion a day. Compare that to the $25 billion a day volume that the New York Stock Exchange trades. Making money in such a market should be easy, right? Not necessarily. But it can be done. And with the advent of the internet, its now more easier than ever for the average person to get involved in speculative forex trading. In the past, forex trades had to be carried out through a broker and the initial requirement was that you could trade only if you had about ten to fifty million dollars to start with! Today, carrying out a trade can be done by anyone from the comfort of your home or in front of any pc with internet access using an online trading account.
The fact that there is so much risk and yet so much potential involved with forex trading is what draws most people to it, sort of like gambling. Its all about the adrenaline rush. And making money, of course.
There are many benefits and advantages to trading forex such as no commissions, no middlemen, no fixed lot size, low transaction costs, a 24 hour market, no one can corner the market, leverage, high liquidity, free “demo” accounts, news, charts, and analysis and “mini” and “micro” Trading
However, the speed and complexity of market movements can be a deterrent to aspiring investors. Unless you have a trading system you follow and a good grasp of the forex market, you can find yourself struggling.
So many new entrants into the forex market always tend to search for the ‘ultimate’ forex trading system. And there are so many such trading systems being flouted on the internet as the next best thing.
A good trading system will provide you ‘signals’ or ‘alerts’ about market movements as they arise based on popular Forex indicators like the Relative Strength Index and MACD lines. However, what you need is a complete trading system, one that gives you a trading strategy or ‘auto trade’ option, not just a signal service.
With time, it is important that you take the time to develop your own trading strategies. Take the time to sit down and thrash out your entry and exit tactics.