Opportunities the Forex Market Offers

The Foreign Exchange Market (Forex) is a huge market that is traded six days a week and is open 24hours per day. Because there are trillions of dollars traded every day around the world there is an opportunity to buy and sell with the intent of making a profit every day and in some cases several times a day.

What makes the Forex market different to shares is that it is not run through a Stock Exchange like New York or London but the transactions are made through instantaneous transactions that can be placed from anywhere in the world as long as you have access to your computer and a broker.

The other major difference is that you as a trader can trade regardless of which way the currency is trending. In other words if the USD is going up in value against the GBP (or any other currency it pairs with) you can buy USD and take your profit, and if you believe it will go down in value you can sell and take your profit.

This is a very important point to understand, and is especially true in today’s global economy. If you held stocks or shares that were plummeting in value you would be lucky to find a buyer and by the time you did the value could have dropped even more.

Another main point to understand with the forex market is, you want constant movement, with the currencies going up and down as this gives the day traders more opportunities, when there is a large volume of trading the waves are more predictable.

This is quite different from when the markets are volatile as they have been over the last 6 weeks with some currencies. When they are volatile any day trading can become high risk with random moves wiping out your equity.

Some traders believe that trading on any Friday is high risk due to Government announcements that cause spiking for a very short period and cause you to lose your margin.

Forex trading is high risk if you approach it in the wrong way. You must learn to manage your risks and look for ways to give yourself an edge otherwise you are gambling. Automated forex trading might be the way for you to lower your risks.

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