Day trading Forex
Every hour of every day billions of dollars are flowing through the Forex trade. Foreign currencies traded by people from all over the world makes the Forex market a stable for experienced traders, and always follow the experienced ones. If you are interested in learning how to trade Forex on a day to day basis, this article will take you through some of the basic knowledge you are going to need to find a profitable strategy. To make your own strategy you will need to know to basics of what Forex is about, next you need to learn about common mistakes and pitfalls and lastly how to extract your facts and data in a reliable way.
So, Why Forex?
If you are not totally convinced to start Forex trading we will just quickly run over the biggest upsides to this specific market. The best reason is the shear amount of trades happening worldwide every day. All of the trades made in a single day amount to roughly 3,2 trillion dollars, which makes the Forex market a regular gold mine for day traders. Next, let us talk a little about diversity. If you are looking to diversify your portfolio currencies are a great option, with the 8 major world currencies and countless regional currency pairings, the opportunities are many and profitable. You will also notice that the transaction fees and other costs are low on the Forex market compared to others, and smaller fees mean higher profits.
Far the most of forex traders focus on the seven most liquid currency pairs on the market. The first four of these pairs are called “The Majors”;
These seven pairs (plus a few other combinations of those currencies) make up an astounding 95 % of all speculative forex trading. The keen observer would have noticed that the American dollar is a part of all the pairings, which is because the USD is the world’s leading reserve currency, and it’s a part of 88% of all currency trades.
How and Where?
How and where are very identical to day trading other markets, except that when day trading forex you are selling and buying currency at the same time. What this means practically is that the exchange rate you see when browsing currencies are the purchase price between the two currencies. Let us take a quick example; if you find the rate for EUR/USD, that rate tells you how many USD you can buy for a single EUR. So if you think the EUR will rise versus the USD, you should try to buy EUR with USD.
This has just been a brief surface scratching and if you want to start trading, you should start digging deeper into the dynamics of the forex markets. Information is widely available and you should not have any problem finding what you need. I will end this with a “Good luck!” and hope you go out and make profits.