Learn About Online Forex Trading And Its Benefits
Online Forex trading is trading of different foreign currencies. Before, the trade was limited to institutional traders and large banks but now with technological advancements and change of regulations small traders can also trade currencies using different online trading platforms.
The Foreign exchange market, popular as Forex (FX) market, is a worldwide market to buy and sell currencies. It deals with a large volume of transactions all through the day, five days a week. Currency exchanges of about 1.5 trillion US dollars take place daily. The US Treasury Bond market averages about 300 billion dollars a day and US stock market exchange averages 100 billion dollars a day.
The market for exchanging currency was established in the year 1971 with abolishment of fixed foreign exchanges. Currencies were valued at ‘floating’ prices determined by demand and supply. FX grew gradually in the 1970’s but with technological advancements of 80’s currency exchange trading grew from 70 billion dollars a day to 1.5 trillion dollars a day.
The foreign exchange market consists of 5000 trading institutions like central banks, international banks, brokers and commercial companies for all kinds of foreign currency exchange. There is no one particular location for a forex trader to conduct his/her trade. There are several locations like Tokyo, Frankfurt, New York, Hong Kong, London, Paris and Singapore in this trade. However, transactions usually take place over the Internet, fax or telephone.
Businesses usually make use of the FX market to sell and buy products in other nations but most activities on currency trading are done by forex traders who use it for generating profits from small movements in market. Although there are several big players in currency trading, small investors can also take part in the trade. Thanks to the changes that have been made in the regulations recently. Before, there was a given transaction size and foreign exchange currency traders were needed to meet those financial requirements strictly. But with the advent of online currency trading, regulations have changed and now big interbank units are allowed to break down in smaller lots.
The worth of each lot is about 100,000 dollars and every lot of accessible to individual investors via ‘leverage’. Basically, lots may be controlled with leverage of 100:1, which means 1,000 US dollars would control 100,000 dollars currency exchange.
There are several benefits of forex trading:
Because of the market size, the investments are very liquid. International banks and such other trading institutions keep on offering bid and ask proposals and the huge transactions everyday means there always remains a seller and buyer for a currency.
The FX market remains open all through the day, five days a week. It opens on Monday morning (Au time) and closes on Friday afternoon (NY time). Traders can also trade currency via online from the comfort of their office or home.
The fluctuations in currency usually take place because of the changes in the economies of the nations. Everyone can access news regarding these changes. There is no ‘insider trading’ in foreign exchange trading.
There are also no commission fees, which means the traders, do not have to pay anything to the brokers for assisting them in the trade. Brokers generally earn cash by setting ‘spread’.
The Foreign exchange market, popular as Forex (FX) market, is a worldwide market to buy and sell currencies. It deals with a large volume of transactions all through the day, five days a week. Currency exchanges of about 1.5 trillion US dollars take place daily. The US Treasury Bond market averages about 300 billion dollars a day and US stock market exchange averages 100 billion dollars a day.
The market for exchanging currency was established in the year 1971 with abolishment of fixed foreign exchanges. Currencies were valued at ‘floating’ prices determined by demand and supply. FX grew gradually in the 1970’s but with technological advancements of 80’s currency exchange trading grew from 70 billion dollars a day to 1.5 trillion dollars a day.
The foreign exchange market consists of 5000 trading institutions like central banks, international banks, brokers and commercial companies for all kinds of foreign currency exchange. There is no one particular location for a forex trader to conduct his/her trade. There are several locations like Tokyo, Frankfurt, New York, Hong Kong, London, Paris and Singapore in this trade. However, transactions usually take place over the Internet, fax or telephone.
Businesses usually make use of the FX market to sell and buy products in other nations but most activities on currency trading are done by forex traders who use it for generating profits from small movements in market. Although there are several big players in currency trading, small investors can also take part in the trade. Thanks to the changes that have been made in the regulations recently. Before, there was a given transaction size and foreign exchange currency traders were needed to meet those financial requirements strictly. But with the advent of online currency trading, regulations have changed and now big interbank units are allowed to break down in smaller lots.
The worth of each lot is about 100,000 dollars and every lot of accessible to individual investors via ‘leverage’. Basically, lots may be controlled with leverage of 100:1, which means 1,000 US dollars would control 100,000 dollars currency exchange.
There are several benefits of forex trading:
Because of the market size, the investments are very liquid. International banks and such other trading institutions keep on offering bid and ask proposals and the huge transactions everyday means there always remains a seller and buyer for a currency.
The FX market remains open all through the day, five days a week. It opens on Monday morning (Au time) and closes on Friday afternoon (NY time). Traders can also trade currency via online from the comfort of their office or home.
The fluctuations in currency usually take place because of the changes in the economies of the nations. Everyone can access news regarding these changes. There is no ‘insider trading’ in foreign exchange trading.
There are also no commission fees, which means the traders, do not have to pay anything to the brokers for assisting them in the trade. Brokers generally earn cash by setting ‘spread’.