|
One
of the reasons which has made the forex market
attractive and into one of the fastest growing
markets is it's easy access and volatility. The
larger the movements in the market, the greater
the scope of making large profits. Many
techniques, charts and systems have been
developed to spot trades which are highly
profitable. Many traders (especially those who
are new to the forex market) tend to run systems
on demo accounts to test and perfect certain
systems before going onto live accounts and
placing real trades.
Forex Market Opening Times
The
forex market opens between Sunday from 5:00PM
EST and closes on Friday at 4:0PM EST. It opens
in Australasia and closes in North America. The
forex market is spread across different regions
around the world. When one market closes another
one opens, hence effectively making it a 24 hour
market for which to trade on.
Major Currencies Traded on the Forex Market
The
currencies most commonly traded on the forex
market are:
The United States Dollar (USD)
The Great British Pound (GBP)
The Euro (EUR)
The Japanese Yen (JPY)
Australian Dollar (AUD)
Canadian Dollar (CAD)
Other currencies are also traded but the above
are considered to be the most commonly traded.
Currencies are traded as currency pairs and are
often seen as symbols such as: GBP/USD and USD/JPY.
Forex Brokers and Trading Platforms
There are literally hundreds of forex traders
who offer a platform to trade the forex market.
Even though the majority or forex brokers will
accept traders from around the world, it maybe
wise to choose a broker which is based in your
country or region.
Most
brokers offer SWAP free accounts which means
that you will not pay or be paid interest on
these accounts. Making forex religiously legal
for certain groups.
Most
brokers will allow you to try their trading
platform for free using demo accounts. This will
allow you to make real trades without actually
trading using real money. This is a great way to
get used to the brokers trading platform.
A
lot of brokers will allow you to open live
trading accounts with a minimum balance of $1.
The larger, more established brokers will only
allow accounts to be opened with larger amounts.
The
2 most common trading platforms used by forex
brokers are:
Online Trading Platforms and the Meta Trader 4
Platform.
Online trading platforms are a way of making
trades directly from your brokers website.
Different brokers have their own designs and
layouts for their platform.
Meta
Trader 4 is a Windows based trading platform and
is also the most common and one of the most
powerful. This is a great stand alone tool for
making trades, checking charts, running
automated trading systems and it's generally
quite easy to use. You will have to get used to
where everything is but once you know, it can be
very easy to use. Most brokers who offer demo
accounts run on the Meta Trader platform so you
can play around with the platform using a demo
account. If you mess up your demo account you
can always open a new one. In fact there is no
limit to the number of demo accounts you can
open.
Glossary of General Forex Terms
Ask Price: This is the price at which a
currency pair can be purchased.
Base Currency: This is the term given to the
first currency in a currency pair. For
example the base currency of the pair GBP/USD
would be GBP.
Bear Market: This term is used to describe a
decline in the market.
Bid Price: This is the price at which a
currency pair can be purchased.
Bull Market: This term is used to describe a
growing market.
Closed: These are trades which have had
their positions closed.
Hedge: These are trades designed to reduce
risk. A perfect hedge eliminates risk.
Long: This is referred to currency pairs
which have been purchased.
Margin: This is the amount of balance
required to to open trading positions and
keep current positions.
Open: These are any currency pairs which are
still trading.
Short: This is referred to the currency
pairs which have been sold.
Spread: This is the difference between the
Ask and Bid prices. The difference is
measured in pips.
Pip: This is the incremental movements in
trades.
|