One of the most popular currency trading strategies in recent history, the carry trade has been successfully used by traders for years. With recent market conditions, this very popular strategy is beginning to look like a losing proposition.
December 30, 2008 by tarun321
What is Forex?
The term “FOREX” stands for Foreign Exchange
FOREX (or FX as a short abbreviation) is a global currency exchange market where foreign currencies from all over the world are bought and sold for profit.
Forex is the largest and most liquid market in the world
Forex is the largest and most liquid market in the world where trillions of dollars exchanges take place every day. That’s an enormous money flow. No stock market exchange in the world come close to these numbers.
Currencies in the Forex market are traded 24 hours a day 7 days a week. Market literally follows the sun around the world. Trading moves from major banking centers of the United States to Australia and New Zealand, then to the Far East, gets to Europe and finally returns back to the States.
Trading Forex is all about exchanging currencies
Trading on Foreign exchange market simply means buying of one currency and selling another at the same time. In other words, the currency of one country is exchanged for currency of another country at the current exchange rates.
Foreign currencies are always traded in pairs – EUR/USD, GBP/USD, EUR/JPY etc. Around 70% of all transactions made with major currencies like U.S. dollar, Australian Dollar, British Pound, Swiss Franc and Japanese Yen.
Nowadays Forex is available to small investors
While in the past Forex market was not available to small investors (individuals) due to large minimum transaction sizes, today Forex brokers are able to break those large sizes into a smaller unit lots and thus offer small investors an opportunity to buy or sell currencies side by side with regular core Forex market investors such as large banks, central banks, multinational corporations, hedge funds and other financial institutions.
Being incompetent in Forex can be expensive
Forex market is huge and plunging into trading without knowing its rules, without knowing what is Forex will be equal to swimming in the pool with ocean sharks. The dominant Forex players such as banks and hedge funds have a power to influence market moves and currencies exchange rates. For inexperienced traders investing own money in such game is as risky and uncertain as gambling. It could turn into a million fortune only in a couple of weeks or become a disaster for those who was ignorant in learning.
Forex Trading with Fibo-Forex: Trade Currencies at the best trading conditions.
