Everyday, currencies are traded in an international foreign exchange market, otherwise known as the forex market, with the main marketplaces (otherwise known as bourses) existing in the world’s financial centes New York, London, Tokyo, Frankfurt and Zurich. Historically, the only way to participate was from the trading floor of one of these bourses, but today, people can trade forex from anywhere through a secure internet connection and a PC.
Today’s traders operate in a global network, taking positions in the market and making investment decisions based on either relative value between two currencies, or a particular currency’s actual price. Currency value fluctuations are constantly renegotiated through trading activity, and this activity, and the corresponding currency values are also indicators of the levels of currency supply. Forex traders have the aim of using the smallest amount of one currency, say the US dollar, to purchase another currency like the British Pound. If supply of the pound lessens in a busy market, it will cost more dollars to buy pounds, and the forex trader hopes to sell their pounds at a higher than their purchase price.
An example of market behaviour greater demand for the Euro might indicate a weakening supply. Low supply and increased demand will drive the price of the Euro up
against other currencies like the dollar, until the price better reflects what traders are prepared to pay when short supply exists. Another way to look at this situation is this higher demand means it will cost more dollars to buy the Euro, which equates to a weakening of the dollar in comparison. Analysis of situations such as in this example forms the basis for a trader’s investment decisions, and they will purchase or sell currency accordingly.
This should be remembered, as while many see the foreign exchange market as the vehicle for converting their home currency while travelling abroad, many others choose to use the market to advance their financial position and secure their future.
About the Author: Jay Moncliff is the founder of www.isnare.com
Advantages of Trading FOREX over Stocks and Commodities.
There are many advantages to Trading FOREX as your main income generator. Let’s start by something that may be worrying you already. “Do I need a Diploma or some kind of Certification to trade FOREX?” The answer is this: When attempting to make...
Beginning Forex - How Are Lots Traded & What The Heck is a PIP?
If you are new to Forex, no doubt you are confused by all of the
strange and unfamiliar terminology. For example, what is a pip?
Also, you are probably already aware that Forex trading can be
risky. How can you limit your loss and best protect...
E Gold Investments: Investing Smartly With E-Currency Exchange
Investors are now starting to move their investments to the most
recent investment trend: Making money with E-gold.
When you make an investment in E gold is a all about a
profitable system that allows you to capitalize from the money
FOREX 101: Make Money with Currency Trading
For those unfamiliar with the term, FOREX (FOReign EXchange market), refers to an international exchange market where currencies are bought and sold. The Foreign Exchange Market that we see today began in the 1970's, when free exchange rates and...
My Most Recent Experiences About E Currency Exchange Trading
You keep hearing about this money generating model that takes no
marketing or selling, merely 60 minutes a day (at the most) and
no genius skill.
I have to see it to believe it!
At the least that was the 1st feeling for any person that...
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.
** The Views and opinions represented in the provided website links and resources are not controlled by the Referring Broker or the FCM. Further, the Referring Broker and the FCM are not responsible for their availability, content, or delivery of services.