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Advantages of Foreign Exchange

Advantages of Foreign Exchange

More than 80% of daily forex trading involves major currencies like Australian Dollar (AUD), British Pound (GBP) and GBP / USD is known as cable because GBP / USD were the first two currencies to be traded against one another, Canadian Dollar (CAD) ), Japanese Yen (JPY), Swiss Franc (CHF), and the US Dollar (USD). USD is like the world reserve Currency this makes USD Currency pairs more volatile than any of the crosses eg. EUR / GBP.

Forex Trading is not centralized on an exchange. It is a 24-hour market, and trading moves from major banking centers like Wellington, Sydney, Japan, London and New York in that order. In my opinion the majority of trading takes place in european market hours.

The attraction of forex over stocks and shares is there are no fees, with share trading you have to pay a broker to buy shares and and then you have to pay again to sell them even if you've made a loss.

Forex brokers make their money on the spread that means the difference between the Bid and Ask price.

Some Trading Terminology

PIP

Used in currency trading as points are in stock trading stands for price interest point.

Bull Market

Means traders are buying or going Long.

Bear Market

Means traders are selling or going Short.

Stop Loss

The point at which you cut your loses this should be decided before entering a trade, never trade without a stop loss.

Limit Order

The point at which you close the trade and take your profits.

Source by Katarina Stubbles

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