Online Forex Trading

Posted by Deb | Forex,Guest Post | Tuesday 29 October 2013 1:14 am

Is there anything today that cannot be done via the internet? Aside from smell (which they are working on) and taste, we find ourselves more and more living in a virtual world.

As little as 20 years ago, most investors invested through the services of a broker. Often orders were taken via the telephone, but mostly it took a personal visit to the broker’s office in order to get an order filled. Physical tickets were handled and floor runners ran to the market floor to place a trade.

Practically all trading is done today online. It is faster and more convenient and highly impersonal. Traders need never meet the broker who places the trade and are totally ignorant of whether or not their money is handled properly.

Forex, or foreign exchange, trading began in 1997 and was conducted by big players such as financial institutions, international banks and wealthy investors with substantial portfolios of over $1,000,000. Forex began as an online investment and continues to be the largest financial market in the world despite the fact that there is no physical marketplace.

Over the years, Forex brokers opened their doors to individual traders and with the lackluster performances of the stock and bond markets, many traders have moved their monies over to Forex.

Forex traders bet on the movement of the price of the currency. The U.S dollar is considered the strongest currency and the EUR/USD is the most popular currency pair traded.  A host of commodities such as gold and petroleum products are internationally priced in dollars and require payment in US dollars only.

Many factors determine Forex prices including economic factors such as interest rates and inflation. In addition, political issues and social changes create price fluctuations. Often these reactions are short lived but they are enough to make a Forex trader lose a substantial amount of money.  A surplus or shortage of a currency can cause major fluctuations in the Forex rate of any currency.

Forex markets are open 24/5 on a continuous 24-hour basis and are not governed by the rules of any particular country. However, in order to protect the individual investor, most Forex firms are regulated by a supervisory agency and must comply with the regulator’s stipulations.

Bitcoin trading operates in a similar nature to Forex trading.  This popular virtual currency can be traded online against other currencies and transactions can be completed in mere seconds.  Although there is no reputable regulation yet, there are many movements to have this form of trading regulated in the near future.

Online Forex

Anyone interested in trading Forex can open an account with the myriad of online Forex brokers. The sites are informative and interactive. They can provide the novice trader the information needed to get started. Some sites, however, can be overwhelming and often the beginner gets lost in the maze of data. It is advisable for any new trader to read the online review sites, such as Daily Forex, to compare the features offered by each brokers.

Before placing your first trade, it is essential that you understand the world of Forex. Online tutorials are usually provided on the broker’s site. In addition, free courses, such as FX Academy.com  are offered to those who wish to delve deeper into how Forex works in order to emerge as a successful trader.

The most important feature to look for is the broker’s free demo account. This provides you with the opportunity to trade for several months with virtual money. Practice makes perfect and the more experience you have under your belt before trading in a real account, the more chance you have of coming out ahead. Jump in too soon and you can expect losses.

When you do open a real account, ease into trading by using only the minimum amount required. Often this can be as low as $500. Try to avoid leveraging your account. Trading on margin is a sure way to lose your money and most brokers are only too eager to provide you with up to 200:1 leverage.  Don’t fall for that trap.

A trader must know when to pull out of the trading arena. It takes a lot of time and knowledge to predict the right time to buy or sell but here’s a rule of thumb: If you’ve made some money, don’t be greedy. Pull out while you can. If you have lost money, don’t wait to lose every cent in hopes that things will turn around. Pull out and use whatever funds are left to buy again later. Don’t let your emotions rule.

 

 

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3 Comments »

  1. Comment by Marion from youtube.com — December 9, 2013 @ 11:28 am

    Goood day! Would you mind if I share your blog with my facebook group?
    There’s a lot of folks that I think would really enjoy your content.
    Please let me know. Cheers
    Marion@youtube.com recently posted..youtube.com

  2. Comment by Casinocoin pool from Casinocoin — December 19, 2013 @ 6:15 am

    Great post! Would you mine talking a little bit more about bitcoin trading? And what do you think about trading altcoin like CasinoCoin and litecoin?

    Thanks!

  3. Comment by Deb — January 4, 2014 @ 11:22 pm

    Frankly, I Know nothing about it. Anyone else here to comment about this?

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