foreign exchange program
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(Forex) Forex Investing at the Right Time - The 10 am Rule and How it works By David Jenyns Sometimes it`s wise not to be the early bird when investing in forex, instead wait and see what the day will bring before you take action. The 10 A.M. rule is a great example of this concept, and is Read more...
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FOREX Glossary By David Greene Here are some of the most common terms used in trading forex.Ask Price - Sometimes called the Offer Price, this is the market price for traders to buy Read more...
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Boost FOREX Trading Profits Using These 3 Simple Guidelines By Roxanne Manning FOREX trading is nothing more than direct access trading of different types of foreign currencies. In the past, foreign exchange trading was mostly limited to large banks and institutional traders. Read more...
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FOREX versus Stocks By David Greene
Stocks have been a popular investment for hundreds of years. Companies issue stocks to raise capital for expansion and new projects, and each share of the stock represents a partial ownership in the company.
When the company does well and makes a profit, the value of the stocks should rise. Stock owners can sell their shares for a profit or hold on to the stock for what they hope will be even more gain in the future. Sometimes companies will declare and pay dividends. Dividends are part of the profits that are distributed to share holders.
Stocks are traded on stock exchanges. Most stocks are bought and sold through brokers who charge a commission or fee for this service. American stock exchanges include the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation System (NASDAQ). Most stocks are only listed on one exchange, although large companies may have listings on several exchanges including exchanges located in different countries.
Stocks were traditionally seen as long term investments.
So called 'blue chip' stocks - those having proven value over many years - may form the backbone of an investment portfolio. Short term trading is a relatively new phenomenon made possible with the advent of Internet trading. Day traders attempt to take advantage of large daily fluctuations in the market by buying and selling many times in one trading period. It is requires good trading skills, is relatively risky, and any profits realized are reduced by broker commissions charged on each transaction.
Stocks may sometimes be bought on margin, meaning that the investor borrows money to buy the stocks. Margin rates are usually around 50% - the investor can borrow as much as half the value of the stock.
FOREX
The Foreign Exchange Market (FOREX) is quite different from the stock exchange. In contrast to the stock exchange, the FOREX is primarily a short term market. Most traders enter and exit
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deals within a 24 hour period. Sometimes a trade is made within a few minutes. Many FOREX trades can be made in one day without building up a large brokerage fee because FOREX trades are commission free. Brokers earn money by setting a spread ? the difference between asking and selling prices.
The FOREX is the largest financial market in the world. It is handles transactions worth $1.5 trillion every day. By comparison, all the American stock exchanges combined handle daily transactions worth about $100 billion. The huge volume of FOREX means that it is the most liquid market in the world.
There is always a buyer and seller for any type of currency because the world economy relies on the movement of goods from country to country. The stock market is less liquid because participants may choose to hold their investments or move on to other markets.
The FOREX is not located in any one location. Trading markets are located world-wide and because of difference in time-zones trades can be made 24 hours a day, 5 days a week.
Trading begins in Sydney, Australia on Monday morning (Sunday afternoon New York time) and continues non-stop until Friday afternoon New York time. Stock exchanges have more limited trading hours.
While it is possible to trade on exchanges world-wide, each exchange is independent and operates for just 7 hours a day. There is no way to buy or sell a certain stock that is only traded on one stock exchange when that exchange is closed.
There are other advantages to trading of FOREX. It is more predictable than stocks. It follows well established trends; it allows high leverage, typically 100:1 instead of 2:1 on the stock market; and it doesn't require a large investment . Mini accounts as small as $250 can get you started in FOREX.
One other advantage is that with it is easy to set up a practice account an use the same trading software that you will use once you start to trade real money. This is a great way to get started.
David is a retired forex trader and dealer now living in The Land of Smiles, Thailand, decompressing from over 20 years of trading activity.
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