Any one who has already embarked into the share market would already have an idea what Forex is.
So what Is Forex?
FOREX stands for the extremely popular Foreign Exchange Market.
Essentially simply put the Foreign Exchange Market is where people go to trade currencies. Traders buy and sell these currencies and hopefully try to make a profit while doing so..
The Foreign Exchange Market and the trading as we know it today started way back in the 1970's.The foreign exchange market can now be found wherever there is a financial centre where people trade in the buying and selling of various securities..
Why Are People Trading in the Foreign Exchange Market?
Increasingly people are turning into forex trading now than ever before. The major attractions are that there are no hard-and-fast requirements to join the market. Anyone can enter it and learn how to trade. Some even study in advance to be prepared for the big trading that lies ahead.
Another attraction about forex is the absence of fees which usually have to be paid upfront before the trader is be able to start trading in the stock market. There are no commissions, no brokerage fees and no government fees.
There are no time restrictions as forex is traded 24 hours a day.So you can trade forex whenever it suits you best.
The most beneficial thing by far is that trading can be done in the comfort of your own home.
Anyone can start to trade online. This is ideal for people who stay at home, particularly those who do not feel comfortable in engaging in other online businesses.
With suitable training and a computer with internet access close at hand, success is quite possible within the confines of the home.
How Does One Trade Successfully in the Foreign Exchange Market?
The purpose of 'to buy low and to sell high' must be kept in mind when trading in the forex. This will be the major goal of a trader who wants to succeed and become profitable.
The next task close at hand is to know the trends. This means recognising exactly when a particular currency will buy low or sell high.
Thus, forex trading requires systems that have been tried and tested previously to make certain that any trading decisions made will have more chance of becoming profitable.
There are a few basic systems available which can be used in forex trading.Some can be learnt from tutorials or from actual experience and by exposure to the forex market.
Actually We have quite a few systems available for you already in our Forex Section here on Asxnewbie.
There are different strategies used when trading forex. The first strategy most commonly used is technical analysis.
This provides information that a particular price chain reflects all the necessary information regarding the market. This means a close analysis of the diverse aspects of the currency like the lowest and highest prices or the opening and closing prices.
The other strategy that is most commonly used is fundamental analysis.
As the name implies, it looks at the total situation. It focuses beyond the currency. It also takes into account the situation of the country, economy, politics and even the rumors which abound in the marketplace. Thus this requires more exposure and knowledge on the part of the trader.
The way the Foreign Exchange Market operates assures that there are many openings and opportunities available for the forex trader to trade regularly.
There are of course many traders who could be possibly interested in trading forex but are very afraid to take that first hesitant step. This attitude can be turned around by firstly aquiring a good working knowledge and then by taking the necessary steps required to make their foray into the forex market a profitable and successful one.