Currency trading is not the monopoly of the nerds and the geeks
The general perception is that any and every person who is
involved in the business of trading of currency or foreign
exchange is a person who has a super high IQ. To hear words and
phrases like liquidity ratio, central bank intervention and
inflationary demand makes us feel as if we are back in the
boring and inherently avoidable lecture on economics that we
were forced to attend in our college.
However, all these preconceived notions apart, forex or currency
trading is not the domain for the super intelligent alone.
There is no doubt that you need brains to get involved in forex
trading. Then, I bet you cannot name a single sphere of human
activity that does not need the application of one's mind. A bit
of brains and lot of research can help you make a tidy sum in
Till recently, the forex trading market was not open to
individual investors. To take part in the process of buying and
selling of currency, you either had to be a big bank with lots
of deposits and assets under your belt or you had to be a big
financial institution that carried out the business of trading
in forex as its primary activity. Today you do not need a lot of
capital to earn money in currency trading. A few thousand
dollars as the initial capital is sufficient to get you started.
The advantages of trading in currency are manifold. The biggest
advantage is that the currency trading market is a market that
remains open round the clock. No other
financial market stays
open and operation twenty-four hours a day. This round the clock
functioning results in constant and immediate reflection of
economic, political and social events. A smart investor can take
advantage of the fluctuation to make huge profits.
Further, the forex market works without any centralized
exchange. There is direct interaction between the persons
involved in currency trading over the telephone or electronic
However, just because it is easy to enter the currency trading
market does not mean it is easy to make profit in the currency
trading market. It is very important to possess knowledge of the
forex market. You will have to grasp and establish your command
over basic concepts. You will have to understand the
significance of the technical indicators of the functioning of
the forex market. Trying to gain complete knowledge of the
currency market without actually entering into the field is like
trying to learn swimming without entering the water.
By arriving at a judicious combination of knowledge, instincts
and risk, one can make a lot of money in the currency
trading market, or the forex market as it is known as, with
very little initial investment.
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Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest / trade in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading.
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