Forex Market and Participants
The Foreign exchange (FX) market is an exciting market with participants that cuts across the globe.
It is the largest market in the world and it accounts for over four trillion dollars traded every day. However, the participants in the Forex Market include Central Banks and Financial Institutions.
Furthermore, Hedge funds, Corporations, Large institutional investors, Wealthy people and Individuals like you and me also participate in the market.
Forex on it’s own is all about probabilities, risk management and money management.
In Forex trading, there is no single method or strategy that generates profit all the time.
The most important aspect of trading the Forex market is to position oneself in such a way that losses are reduced while profits are multiplied.
This type of positioning can be possible if you apply proper risk management in combination of proper understanding of probability and money management.
Forex Trading Sessions:
The Forex market opens twenty-four hours a day and five days a week. Forex market is always closed on Saturday, Sundays and on bank holidays. There are three primary trading sessions in the market and they are; New York session, London session, and Tokyo session.
However, each trading session has its own peculiarities as regards currency pair volatility and characteristics. EURUSD pair, for instance, is more volatile during the London and New York session while the JPY pairs are more volatile during the Tokyo session.
Basically, trades in the Forex market can be executed by investors through several means such as mobile phones, Ipads, computers and others. Investors trade Forex through forex brokers. However, Forex brokers are companies that allow investors to buy and sell foreign currencies through their platforms.
Trade execution time differs from one broker to another. While broker spread per currency pair differs from one broker to another. Some brokers offer commission-free accounts to their clients while other offer swap-free account packages.
Traders use Technical analysis and Fundamental analysis to make trade decisions. The MetaTrader 4 platform is the most commonly used application by forex traders. The application can be downloaded onto the computer system or on a mobile device.
Forex Trading Styles:
The four most common trading styles are 1. Day trading 2. Position trading 3. Swing trading and 4. Scalping. Looking at Day trading, it is the most common style where traders open and close trades the same day. On the other hand, Position traders allow the market trend to guide them, and they place and hold trades for some time by using the daily, weekly and monthly time frame charts.
As the name implies, Swing traders enter trades at the point when a trend changes. They jump in when a new trend forms on the chart. Scalping style is a very active trading strategy employed by traders who hold positions for a very short time. Scalpers trade in very quiet markets that are devoid of volatility.
Nevertheless, the four trading styles above have their risks and this should be thoroughly assessed by the trader before the strategy application.
Do you currently have a job and you are thinking of how to make extra income? Try Forex trading. It is easy, and you can learn it in few days. Many other extra income making businesses are available online but one cannot compare such businesses with FX Trading.
Successful traders cut their losses quickly and allow their profitable trades to run so that they can book profits at the end of the day. You can surely make a living in Forex trading if you have patience, follow some set rules and principles and you have good money management plans or skills that guide you.