Saturday, August 18, 2012

Success In The Forex Market

The Forex market involves trading one currency for another. The currency exchange takes place between currency speculators, central banks, large banks, governments, multinational corporations, and other financial markets, and practice has produced the largest financial market in the world. More than three trillion dollars are traded every day in the currency market, and that makes staggering foreign exchange market is much larger than all U.S. equity markets combined.

The operations are performed in all corners of the world, and most of them are executed without cash trading hands. The Forex market is open twenty four hours a day to respond to new political developments, social and financial. The market opens Sunday night and closes on Friday night. Most financial experts say the currency market has a low commission / trade due to the relationship between the size of the shops despite some currency traders have introduced a fee per transaction and the spread of pips. The pip spread is the difference supply and demand / price. This difference is considered the commission for each transaction.

The forex market has different levels of trade pips rates and the Commission varies depending on the customer and the value of trades. The big banks have a small pips extension, investment banks, large retailers, and multinational companies have a slightly greater extent, and small businesses and individual investors enjoy an even greater extent. The only currency prices may fluctuate in relation to another currency.

Contrary to binary options, currency trading is done in currency pairs. The most popular pairs are U.S. Dollar and the pound sterling (USD / GBP), the U.S. dollar and the euro (EUR / USD), the U.S. dollar and the Japanese Yen (USD / JPY), and several other currencies as the dollar from Australia, the Swiss franc, and almost any other currency that is recognized in the currency market.

Most forex traders use a ratio of 100:1 for operations so that a position is required only 0.000, 000 investment for the control of that position. Most merchants require investors to have more than the amount of trade in the account to the account do not enter a negative position. The lot is 100,000 units of base currency. Currency pairs are acquired through the purchase of 100,000 units of the counter or quote currency. In a trade of EUR / USD the USD is the base and will always have a pip of a 1/100 of a percent trade. The pip value varies depending on the base currency.

The currency in most countries is constantly fluctuating with the exception of the Chinese yuan Most governments allow their currencies fluctuate so that the foreign exchange market always offers opportunities to investors and financial fiascos. The Chinese government controls the fluctuation of the yuan and this creates an enormous amount of criticism from other countries who believe that China is artificially controlling the value of their products, and demonstrating that they are the next superpower. If the value of the currency traded in the forex market is controlled by governments, the world economy is affected.

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