Currency Trading FOREX

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Currency Trading FOREX

Currency trading FOREX or Foreign Exchange market is made for those who want to make money trading currencies. On stock market you trade papers that represent companies, and in FOREX market you also trade papers that well… represent entire countries.

In FOREX, trading instruments are currency pairs such as EURUSD, USDCAD, USDJPY, and so on. When you buy EURUSD currency pair, you sell your US dollars and buy Euros. When you close this position, you sell these Euros and buy US dollars back. Depending on whether Euro appreciated or depreciated in value, you win or lose.

Currency Trading FOREX usually involves leveraging because prices of currencies do not change that much as stocks do. Without leveraging, you would have to have extremely large amounts of money on your live account in order to make a buck trading FOREX.

Usual leveraging in currency trading FOREX is 100:1, 50:1 or 20:1. Less common is 200:1 because it makes your trading extremely risky.

To trade currencies, you can use a regular trading platform such as MetaTrader. Many brokers let you trade stocks and FOREX simultaneously using the same terminal.

Currency Trading FOREX is considered to be more risky than stock trading due to a very high volatility of the currency pairs offered as instruments. But on the other hand high volatility gives you plenty of opportunities for big returns.

With a good trading system, money management and well-defined rules you can safely make a buck to afford a lifestyle of your choice by trading currencies.

 

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