Forex trading is nothing more than direct access trading of
different types of foreign currencies. In the past, foreign exchange
trading was mostly limited to large banks and institutional traders.
Recent technological advancements have made it so that small traders can
also take advantage of the many benefits of Forex trading by using the
various online trading platforms. By Roxanne Manning.
Forex markets possess unique attributes that offer unmatched
potential for profitable trading in any market or any stage of the
business cycle. For starters, Forex trading boasts a 24-hour market,
giving traders the chance to take advantage of profitable market
conditions anytime. Secondly, the Forex market is the most liquid market
in the world. Forex traders can enter or exit the market whenever they
want, during almost any market condition. There also exist minimal
execution barriers or risk and no daily trading limits.
For all the advantages of the Forex market, one glaring weakness
emerges. The Forex market is seen as unregulated although the
operations of major dealers, like commercial banks in money centers, are
regulated under the banking laws. The daily operations of retail Forex
brokerages are not regulated under any laws or regulations specific to
the Forex market. Many of these types of establishments in the United
States, don't even report to the I.R.S. To make the most of the
explosive potential of successful Forex trading, individuals should
follow these guidelines.
1.Determine the quality of the broker institution you choose.
Unlike equity brokers, Forex brokers are usually attached to large banks
or lending institutions because of the large amounts of capital that is
required. Forex brokers should be registered with the Futures
Commission Merchant (FCM) as well as regulated by the Commodity Future
Trading Commission (CFTC)
2. Request a free trial. Before you commit to any broker, be
sure to request free trials so that you can test their different trading
platforms. Brokers usually provide technical like Ichimoku Clouds as well as fundamental
commentaries, economic(indicator) calendars and other research as a means of
assisting you. Basically, a quality broker will provide everything one
needs to succeed.
3.Monitor two financial meetings to provide insight into the
upcoming Forex market. Two important meetings Forex traders should watch
for are the federal Open Market Committee and the Humphrey Hawkins
Hearings. By reading the reports and examining the commentary, Forex
fundamental analysts can get a better understanding of any and all
long-term market trends it also allows short-term traders to be able to
profit from extraordinary happenings.
