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Forex Day Trades
By John | September 3, 2010
The foreign exchange market is also known as the FX market, forex market, and the currency trading market. Exchanging that takes place between two counties with different currencies is the core for the forex market and the background of the trading in this market. The forex market is over thirty years old, established in the early 1970’s. The forex market is centered on the trading and selling of currencies.
Forex day trading is similar to day trading in other markets. It is by definition trading for one day. In simpler terms trader enters and exits the trades in the same day. Traders intention is to take small profits each day instead than letting the trades run for days, weeks or even months. Another term for day trading is scalping.
Major currencies are USD (United Sates Dollar), EUR (Euro), JEN (Japanese Yen), GBP (Great Britain Pound), CHF (Swiss Franc). The trading is carried out in pairs. For example EUR JPY is a trade of Euro vs Yen. The stated rate is 1 Euro = (current exchange) in Yen. If the trade of EUR JPY is quoted at 133.00 it means 1 Euro buys 133.00 Yen.
Forex day trading is a process of taking small profits along the way of trading. For example the goal is to make 20 pips profit each trading day. This equates to approx. $ 200 US dollars. The price varies as the exchange rates of each currency vary.
The difference between the stock market and the forex market is the enormous trading that occurs on the forex market. There is millions and millions that are traded daily on the forex market, almost two trillion dollars is traded daily. The amount is much higher than the money traded on the daily stock market of any country. The forex market is one that involves governments, banks, financial institutions and those similar types of institutions from other countries. This is the main reason for forex day trading. It allows easy entry and exist since it is such a large market.
What is traded, bought and sold on the forex market is something that can easily be liquidated, meaning it can be turned back to cash fast, or frequently times it is actually going to be cash. From one currency to another, the availability of cash in the forex market is something that can happen fast for any investor from any country. Think about a trip you may take to a foreign country. Where are you going to be able to ‘trade your money’ for the cost of the money that is in that other country? This is FOREX trading basis, and it is not available in all banks, and it is not available in all financial centres.
The forex market is one that is open generally twenty four hours a day because the great number of countries that are involved in forex trading, buying and selling are based in so several different times zones. As one market is opening, another countries market is closing. This is the continual method of how the forex market trading occurs. The markets are called by their time zone such as Asian and European market.
Topics: Trading |
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