You might be quite surprised to hear that FOREX trading is one of the largest trading markets in the world. According to BIS, the trading volume of the FOREX market is $6 trillion daily. The Trading in FOREX is one of the biggest financial markets across the globe but is not familiar with retail traders. With the popularization of online trading as a means. The trading in currency is the primary domain of the financial institutions, hedge funds, and international corporations. While in recent times it has been noticed that the individual investors are quite starving for the information of the world biggest market. Hence we highlight on few questions that help you to trade in foreign currency such as:
Comparatively other financial instruments such as Stocks, F&O trading instruments, etc. Currency Trading doesn’t take place in regulated stock exchange. While currency is not controlled by any of the central governing bodies., hence there are no clearing houses. In a metaphorical sense, It is one of the most liquid markets in the world.
With the first glance, we think the currency trading is a physical exchange of currencies or its an ad-hoc agreement in the structured exchange such as NYSE, CME or LSE, etc but the fact is not so it is totally different. While trading in foreign currency constitutes different experience altogether from markets as it is buying and simultaneously selling the currency pair against each other.
If the traders are dealing in the currency pair: EUR/USD, it means he/she is optimizing the live currency rates with Bid/Ask rates. The beauty of the currency trading it doesn’t come with limit rather it’s in the form of leverage which can vary between, 50 to 500. While some of the brokers may also provide the leverage of 1; 1000.
Most importantly it is impossible to control the currency trading market as there is no insider trading market. But the only thing that affects the FOREX market is economic such as Fed Rates release, Unemployment Figures, Manufacturing (YoY), GDP release, etc.
Just before we come to the conclusion that FX is one of the Wildest juncture and predicament of the Finance and Capital market industry. It is commonly noted as one of the highest forms of a liquid market in the world
6 crucial tips traders need to foresee while trading in FOREX:
While making a successful FOREX Strategy ready to use, Several Key indicators that one has to follow, While designing (Keeping some major Aspects in mind); Given Below are some of the Major highlights that help the Serious Traders to implement one such, They Are:
1) Time Horizon: Deciding the time horizon that might help the traders: Scalper, Day Traders, Long or Medium Term Traders, etc. That enables them to depict & influence their own trading strategy which might put them to its maximum & best effective use ever.
2) Time Frame: It is one of the core aspects as designed & customized trading strategy might work on only one or few timeframes at given point of time. if a strategy channelized on several different time pattern then it might not help the traders to deliver the same results as they use to be. Hence, it is important for a trader to develop a strategy which can be optimized & can deliver a better result on a certain point of time.
3) Risk management: One of the key aspects for a FOREX trader is the risk management, It helps them to predict the market situation as it proper implementation will determine: Whether a trader will able to Survive in such Situation or all of its trades will be lost during the high market uncertainty?
4) Personal Trading Ideology: Almost all the professional traders use a different strategy in order to create some good amount of profitable trades for them. Hence several traders strictly follow their own ideology & trading traits.
5) Capital Requirements: Factually observed, those different Forex strategies have a different capital requirement. Hence practically it is almost impossible for several professional traders to execute their trading order if their capital resource seems to be scarce.