Foreign Currency Trading

The foreign exchange market also referred to  as  the "Forex" or  "FX" is the largest  financial  and the most active market in the world .It is the largest because of  the sheer volume i.e, more than 2 trillion dollars per day and active because of 24 hours non-stop basis . When one country may close its market then another  in  another part  of  the  world  has  opened  its  own market due to difference in time zones . Hence , The forex market is open 24 hours 7 days a week to accommodate all the countries.                                           

Foreign Currency Trading in brief :  It is one of the best methods to make money online . It is the simultaneous buying of one currency and the selling of another .Currencies are always traded through a broker or dealer and in pairs . EUR/USD , USD/JPY , GBP/USD and  CHF/USD are  four major pairs traded in  forex trading .Cross pairs  are  also  traded  like   EUR/JPY ,EUR/GBP ,  GBP/JPY  etc . The  money  transactions  are  done  between  governments , international  banks  and  financial  institutions  of  different  countries . The amount  of  money which is   either bought or sold or traded in a forex market can quickly be turned  into liquid cash . One can make profit in case a currency is gaining in value or loosing its value .

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Here are top 10 practical tips which will make you a good forex trader and provide success in your foreign currency trading .

1 To start , download  the foreign currency  trading  platform and  start  practice  with  the  demo account . After making profits from the demo account ,add fund to your real account  by  credit card ,netsafe  card , entropay card , paypal  and  money bookers . Now , you  can  start  trading  with a real account . 
2 Always start foreign currency  trading   with a small  investment and look  for what  the top  50-100 traders  are doing  .  You  can  also  make  your  trading  by  setting  a  take profit value . You  can shutdown your computer or laptop once you reach the target .
3 You must trade in the direction of rising price .
4 You should go through your overall trading once in which you gained and the once in which you lost.
5 During foreign currency trading , if  you  find  a  certain  currency  pair  in better proposition invest in that pair . It will automatically gain demand in future .
6 As a trader , you should consider the technical factors such  as  equity  markets , interest  rates  and international trade of a country which have an impact on  currency performance .
7 You should also consider  the  economic  situation  like  economic  data  releases , policy decision and political events of a country which have an impact on  currency performance .             starting a business
8 You need to aware of three crucial foreign currency trading strategies .These are carry , momentum  and  value trade . Carry  strategy  relates to the  selling  currencies  with  low  interest  rates  but  buying   those currencies  with  high  rates . Momentum  relates to the direction of currency market .Whereas , value trade strategy relates to the position based on the  investor's view of a currency's value .
9 If you choose foreign currency trading as part time job , then concentrate on just a few currency pair  and forget   other pairs .
10 You must consider some important things during  analyzing a   currency  pair . The important  things are liquidity , transaction costs (the spread) and its volatility .

Differences between forex and stock market :

1 The stock market of any country operates with the existing currency of that country . On the other hand ,The forex works with many countries and trades in different currencies .
2 The  stock market can only be traded during daytime , generally  from  9:30 a.m to 4:00 p.m . But ,forex market can be traded 5 days a week and 24 hours a day .stocks  which  belongs  to  a  specific country .The  currency combination is limited in case of forex .
3 The stock market operates in  shares  and  businesses and include hundred and  thousand  kinds  of market .
4 The forex market is largest market in the world which deals with nearly 2 trillions of  dollars  per day .The stock market is much smaller in comparison to forex market.

5 The currency of the forex market is affected by several forums where the currencies are exchanged. A change in currency in a single forum at any time  can  affect  the  market  overall .So, Foreign currency  trading is considered as high  Risk/high reward  business  .  On the  other  hand ,  in  the stock market , the currency is set by a market maker for a specific time which will not changed during  a regular country's business hours . Thus, the loss in stocks is not so high in comparison to forex .
6 Forex traders could obtain a much larger transaction (100 times ) compared to the stock market .