If that put you off then it is just as well because forex online trading is definitely not for the faint hearted, nor is it for the ill disciplined or those who believe they can make a quick buck.
That being said there are day traders who are doing well one the forex market as well as professional and experienced traders experiencing big losses.
Let us look at the market. The currency trading market is an open, over the counter market. That means one is not compelled to go through a clearing house to actually buy or sell. Thus a number of trading platforms have opened up and this, along with the ability to be constantly monitoring via and on line internet service enable real time up to the second trades to take place.
But the currency market is huge with often as much as $4 trillion in trades every day. Individual and day traders are very rarely investing more than a few thousand Dollars at a time so their purchases or sales are not even going to register a blip. But when a big bank comes to the market to buy a $1 Billion Euros the market will move. If one had taken the correct position then one will be smiling but if not one hopes you had your stop loss in place.
The watchword here is discipline and watch the moves like a hawk. If one is going to take a position then be absolutely RIGID about putting a STOP LOSS in place to limit your potential losses. It is also a good idea to put a level at which you will take profit. This is especially important if you are not going to be watching the moves on a minute by minute basis.
The next thing is to open a practice account and study while practicing. It is going to take a while to get the experience and knowledge to make a success. But there are successes to be made. If one studies, gains the knowledge and expertise, uses the available tools to advise one technically on what positions to take and joins the forums and learns to listen to the advice given and weighs it with the news then one can indeed make a steady profit over time.
There are numerous articles and course available to study currency trading. One is strongly advised to go through these articles and courses as those who do do well are the experts. Luck may see one through a few trades and a feeling may be right once or twice. The tip you got from a fellow you met in a bar might be correct in the short term but if you wish to see a consistent long term gain then it is only by trading in forex in a planned and consistent manner that you can hope to achieve.
When you start Forex trading always use money that you can afford to lose. If one has done one’s homework there are good odds but there are odds just the same.
They tend to offer lowest commissions but almost fully automating the trading procedure, even customer support. Often the traders will be limited with the number of markets and products they can trade.
Day trading brokers – also known as direct access brokers, they provide traders real-time access to markets. Products and markets can be limited but they offer some of the most powerful trading systems which tremendously help in active trading.
These are traditional brokerage firms which start offering online trading services. They allow traders to trade a vast variety of products and markets; offers more order types, and plenty of trading services. In return, they charge often high but they are well-informed of market movements and are very good in customer support.
Discount brokers – they usually offer the same number of services as full-service brokers for a remarkably low charge. They highly automate their trading services. But one can never expect the same level of market knowledge, trading assistance and customer support from them.
These are brokers whose primary trading service is for options, an interesting instrument having different underlyings such as stocks, futures, funds, bonds or currencies which offer a traders a option to buy/sell or not to buy/sell the underlyings at a future time.
Funds trading brokers – includes brokerage firms which offer traders access to many mutual funds, treasury notes, bonds and Exchange Traded Funds.
Brokers whose main service is to trade equities. Most brokers you heard about are primarily stock brokers.
Forex trading brokerage firms – these are brokers who offer traders access to the worlds biggest financial market, forex currency trading market. Forex brokers tend to differ from others, as they do not charge any straight commissions, instead they profit from spreads between ask and bid price for a currency pair.
Futures trading brokerage firms – these brokerage firms which allow traders to trade commodity futures. They can be of many subclasses of brokers who specialize in equity futures, currency futures, financial futures, energy futures, commodity futures, etc.
The widespread popularity of online trading among all types of traders have given rise to a variety of brokerage firms. Today traders can trade almost all financial instruments including stocks, bonds, commodity futures, options, funds, currencies, and much more online, from the comfort of their own home. Online trading brokers offered much fast order execution for less charges and made available a range of trading tools which once were available to only institutional and large scale traders. There are many different kinds of classifications of online trading brokers, here are some important ones.
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