Why People Trade Forex
In today's information technology driven economy you can just about trade anything you want. Whether it is currencies, metals, shares, wheat, pork bellies you name it.
Not only can you trade the main security but also in most cases you can trade the derivative of it e.g. Forwards, Futures and Options.
The Forex market is also vital to the general prosperity of the free world economy. Why? Some $1.5 trillion dollars worth of international currencies are bought and sold every single trading day.
It is by far the largest traded market in the world. This volume of trade is equivalent to over six months of trading in the New York Stock Exchange, which has an average daily volume of $10 billion dollars.
Even though the major focus in this country in reference to investing has always been and still is the stock and equity markets, the Forex market is 150 times larger than the New York Stock Exchange.
All financial instruments are commonly referred to as securities regardless of their name. When I mention securities it encompasses everything that can be traded.
The main thing to remember when trading, is first to decide if you are a speculator or investor.
If you are an investor it makes sense for you to know something about the thing you are investing in. It might be that you are in that field already or have a good knowledge base of what you are investing in.
On the other hand if you are a speculator who only intends to hold something for a few hours and are covering many markets, you will not have time to research as much as an investor.
Even as a speculator though, you should know something about what makes that market tick. In the currencies for instance, when the dollar strengthens it can effect all the major currencies at the same time.
In technology shares you might find that the whole sector is strengthening at the same time.
If the interest rates are raised in one country how will that effect the market you are in?
The point in all of this is that I think it is a good idea for people to trade something they either like, have an interest in or at least are familiar with.
For example I would not feel comfortable trading oil because I don't know what drives the market or who the main players are.
Last but not least, the journey to the road of successful trading will make you confront your deepest fears. Your armor on this journey will be confidence, knowledge and believing that you can achieve your dreams.
Never, never equate your success or failure in the markets with who you are as a person!
Related Tags: money, market, invest, broker, trading, forex, currency, foreign exchange, dollar, trader
Martin Chandra is a full-time investor. Get limited offers at here. Your Article Search Directory : Find in Articles
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