Tuesday, November 6, 2012

Forex Trading Method

By Henry Patterollid

Perhaps the best way to earn money online today is through Forex trading.

Forex trading is the means by which different currencies are bought or sold. This trading happens in the Forex market which is dubbed as the most liquid market in the world with an average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world.

Of all these currencies, the main currency used in forex is the US dollar. Some other currencies that are exchanged in the market are the Japanese yen, Swiss francs, British pounds, Euros, Canadian dollars, Australian dollars and the New Zealand dollars.

Each one of these currencies can be traded in three ways. First is through the spot market which permits investors to buy and sell currencies at the current price based on supply and demand. It is followed by forward market which trades specific currencies at specific prices and specific times. The last but not the least choice is the futures market. This type involves investors trading standardized futures contracts on commodities exchanges like the New York Mercantile Exchange.

Many infomercials state the ease and profitability of currency trading for the normal person, but actually it is not as simple as many people are led to believe. There are important points that have to be remembered. One of these concepts is the bid and the quote prices. Bid is the price offered by a buyer. Quote on the other hand, is the amount given by a seller of a currency. The difference between these two prices is known as the spread, and it is quoted in pips. When the buyer and seller agree on the two prices, a trade is executed, and currencies are exchanged. This exchange not a physical one because it can be done online just like through the International Capital market or IC markets which is an avenue for online financial trading. One more vital point is to constantly watch out for the fluctuating exchange rates. You will have to do this so that you can book a profit. Online markets, same as the one mentioned above can help you with this so you really have to have a reliable internet connection if you want to earn money through forex trading.

About the Author:

monte escalier


Post a Comment