What's Trade? - Where to Trade Forex - How to Start Trade
Many traders are beginning to ask around about what's Trade? - What is Trade? - What is Trade? - Where to Trade Forex - How to Trade FX? and How to Start Trade? - the most common questions that most new traders ask are:
- What's Trade? - Where to Trade Forex?
- What is a Platform?
- How to Start Trade?
- What is a Trade System?
Most of these questions are discussed in other topics, but the basic question is What is Forex??
The forex is an international online market where 7.2 trillion dollars is traded everyday.
The trade market was established in 1971, when the floating exchange rates system was introduced. The trade market is not centralized, unlike the stocks.
Trade is done through interbank connections through banks which are known as forex liquidity providers & forex brokers that connect individual traders to this interbank network. Trading therefore occurs over computer and telephone networks at thousands of locations worldwide.
This makes the trade market is a decentralized market formed by a large network of banks collectively known as the interbank market. These banks determine the exchange rates, based on the supply and demand for the currencies.
The trade market is commonly referred to as FOREX, Forex or Spot Forex and this is where banks, companies, investors and speculators exchange one currency for another either for the purpose of facilitating international trade or profiting from the exchange rate difference.
The currencies traded are named using 3 alphabetic symbols, the first 2 represent the name of the specific country while the third symbol represents the first letter/initial of the currency.
The trade market is the largest financial market in the world and 7.2 trillion dollars is traded every day, compared to US stocks that trades 0.5 trillion dollars. Forex is opened 24 hours a day because it's an interbank market whereby if banking centers in the US are closed those in Europe are open, and when these aren't opened those in Asia are opened. The typical Trade day starts in Sydney, then Tokyo, then London and finishes with the New York session.
In the market 90% of all trades is done for the purpose of speculation for profit, the rest is traded for the purpose of settling international trade transactions between countries. This is made possible because the trade market is an over the counter interbank market, that can facilitate transactions between many traders through brokers.
Forex is based on the concept of floating currencies in the open exchange market, in what is called the international money market where the participants are Banks, Brokerages, Fund Managers, Governments, Central Banks & individual speculators. The value of currencies is determined by demand supply forces and a country monetary policy. Other factors that affect currency value is political stability of a country.
Trade for speculators
Until recently, Trade was only available to professional traders from major and international commercial banks, investment banks, money managers, registered FX dealers, international money brokers and large multinational corporations. Now that forex is available online traders want to know What is Trade?
But with the emergence of internet and brokers, speculators and retail traders can now participate in the market, through retail brokers.
These days with the presence of Desktop computers & easy access to internet everywhere, online forex trade has become very popular. There are so many Forex brokers available on the internet.
Traditionally Trade was only available to only the rich who had capital of more than $1 million. However with the growth of internet brokers are now able to provide retail Trade accounts that can be opened with as little as $100 and traders can trade currencies over the internet.
The forex trader only needs to download a brokers online Trade software then open an account with the broker and then start to trade currencies online via the online fx broker.
Trade - How to Start Trade
Trade is not centralized like the futures market or the stock exchange markets. Currency trade transactions occurs over multiple computers and telephones at thousands of locations worldwide, through inter-network of banks known as interbank network.
Trades are placed from Online Trade Platforms like the one below.
The trade market commonly referred to as Forex is where banks, investors, speculators and other trade market participants, exchange one currency for another. The largest trade activity in the forex is between the five major currencies:
- US Dollar
- British Pound
- Japanese Yen
- Euro and
- Swiss Franc
The Trade is also the largest financial market worldwide. In comparison to US stocks which trade transactions $700 billion per day the trades upto $7.2 trillion in a single day.
The trade market is open 24 hours a day and currencies are exchanged in the Inter-bank market. The trade market follows the clock around the world, moves from the major banking centers in the United States of America to those in Australia & New Zealand then to those in Asia, then to Europe & the back again to those in the Unites States.
Until now, only professional traders from the major international commercial/investment banks used to dominate the Trade market. Other market participants who have now joined in range from large multinational corporations, registered dealers, international money brokers, global money managers, futures trader, options traders, retail traders & private speculators.
There are 3 main reasons to participate in the market
- One is to facilitate an actual transactions, where the international corporations convert and cash in profits made in foreign currencies into their local domestic currency.
- Corporate treasurers and money managers also trade Forex so as to hedge against unwanted exposure to future price action movements in the trade market.
- The third & most popular reason is based on speculation for profit. In fact, it is estimated that less than 5% of the total trade transaction activities on the trade market is what actually facilitates commercial transaction, the other 95% is speculation based transactions retail Trade.
The forex market is regarded as an Over-the-Counter (OTC) or 'Inter-bank' market, depending on the fact that trades are conducted between two counter-parties over an electronic network.
Global Trade Hours
Trade market is not centralized within any exchange center, as the case with stocks and futures markets. Trade is a true 24 hour market, where the Trade day begins in Sydney, then to Tokyo, London then New York, all around the globe. When it comes to global trade market, traders can respond to forex currency exchange rate fluctuations caused by economic, social and political events at the time they occur, day or night.
How Do I Begin Trade
If you are looking for a new way of investing your money look no further than Trade. Many individuals have turned to trade activities to replace their stock transactions activities and to supplement their income. When done correctly, you can make a good return on your investment.
What's FOREX?
FOREX is short for trade market. The best way to understand what is FOREX is to think of it as buying and selling money. This is done through the international trade market.
Participants of the trade market buy a particular currency and sell it when it is favorable to do so. Your best chance as a learning trader is to understand analyze the trends so you can pick and trade a trending currency, whether it is the Japanese Yen, the Euro, or another currency.
Practice Trade on Demo Account
Because there's real cash involved in Trade, it is logical that many people are hesitant to join in on the market. The good news is that there are a number of ways to practice without investing real money. You should read up on the various trade techniques such as practice practice trading accounts and thoroughly do your homework. When you are ready, download a Trade platform software and give it a try.
During the practice demo period, you can use virtual money(like monopoly game money) to trade currencies. You can use this time to better understand forex market and how to use the software platform & technical tools. There are many web resources that you can find that offer information on the trade market and how you can analyze the information and predict changes in currency prices. Once you have a good Trade system and a reliable Trade plan that you use and it is profitable on a demo account you can then try to trade with real money.
What's the Risk?
As with any financial investment, there are risks. Even if you research vastwide forex trade techniques, study trends, and learn how to predict changes in the market trend, things can still go wrong. The best advice here is to use your head and better judgment, and most importantly use forex money management principles. Many people will see the power of leveraged forex trade within a few hours and then get greedy and go in over their heads and take risks and then lose their investment because they do not have an investment strategy or a Trade plan. As a trader, you will have to learn when to trade and when not to trade. Many traders become too greedy & overtrade or hold on to a losing forex trade position for too long.
You can use a stop loss order to exercise better control of your trade activities and limit your losses & risks to the downside. You can set up automatic stop orders & the software platform that will close an open forex trade when this target is hit. This also goes both ways: you can set an upper limit to take profit and a lower limit to stop losses.
How to Begin Forex
Where to Trade FX? - The most popular way to trade the online Trade market is to do it online from your home PC computer or office Desktop PC computer which has a Trade platform and a fast inter-net connection. This way you will have greater control and access to your investments via the platform & you can make changes or adjustments any time of the day or night. Online forex trade platforms have become a great way of taking part in the online forex trade market, so you will not find it hard to find Trade platforms or brokers online.
Always test the software using a demo trade account to make sure that you are comfortable with it.
What is Trade Online? - What is Trade? - How Do I Trade? - How to Start Trade - What is Trading & How Does It Work? - What is Trade Demo Account? - What is Trade Real Account? - Learn What is Trade?
