So Is Forex Trading For You?
So What Is This Forex Market
For example, you live in the US and are planning a holiday to Japan. You are interested in converting $5000 of US funds into Japanese Yen(USD/JPY). So you go to your bank and they will give you the current exchange rate, which may be something like:
One US Dollar, $1.00USD is worth 110.5Yen.
So why and what factors causes the two currencies to fluctuate? Each individual countries currency rise or fall is dictated and influenced primarily by their countries economic performance. The forex trader makes money by speculating on which direction a particular currency will go for that day, week or month. If you happen to choose the wrong direction, it’s possible you can lose your entire account balance. So how do you decide?
Fundamental And Technical Based Forex Market Trading
Technical trading the forex on the other hand, involves the precise study of charts and the patterns and the movements the charts take. Although fundamental analysis is always taken into account, most of the trading decisions are based primarily on the behavior of a certain currency pair and why it moves in a certain pattern on a chart. Like there are numerous fundamental economic reports, there are dozens upon dozens of analysis based on indicators and studies based on why a certain currency pair moves up, down or sideways. Each technical study has their own elemental structure and mathematical equations on why their particular indicator predicts where and why a currency pair is moving in a certain direction. Some of them work, the majority don’t, some may work in the short term while others are just too complicated to understand.
Forex Currency Trading Systems
– How Large Should My Forex Account Be?
There is a myriad of options. It is not a get rich quick ‘plug and play’ method of making cash, as it is paved out to be. It takes years of study to correct and refine your trading style. It is not for everyone. Not for the weak of heart or for the impatient.