Foreign exchange traders make money,how to buy stocks for dummies,forex companies in europe - You Shoud Know

13.03.2014 admin
Currency traders deal in pairs, with one major currency constantly rising and falling in value against another. Traders buy or sell currency pairs without broker commissions; the pip spread represents the broker's profit margin. Foreign exchange, or Forex, traders buy and sell currencies, either to hedge their investments or to speculate on the direction of dollars, euros or yen. Currency trades are made on margin, meaning a percentage of the funds needed to open the trade are borrowed. Some prefer fundamentals -- basic, real-world information that tends to move currency values, such as reported government deficits, interest rates, trade balances, economic growth and news events.


On the surface, it's a simple game with a limited menu of options; about a dozen major currencies are traded actively. Others trade with technical analysis -- the study of price charts and mathematical indicators to understand developing trends in currency prices.
In reality, currency trading is one of the more difficult speculations that traders can attempt.
The larger the price spread, the more the pair has to move in the desired direction for the trader to make a profit.
Only a small fraction of the money needed to open the trade is deposited with the broker, meaning that currency trading involves both high potential reward and high risk.


No matter which system is used, however, exchange rates are always subject to sudden, unpredictable and wide price swings that don't conform with expectations, making this type of investing more art than science.



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