How To Separate Hype From Reality In ForexGen trading

For most people who may be thinking of entering the Forex trading game some of the terminology can be

confusing. In fact there are many who don”t really understand what Forex is about to begin with. In a

nutshell, Forex or FX is a term that is used to describe the trading of multiple forms of currency

all over the world. Some want to get into FX just because they like the idea of how exciting and

exotic it sounds to be trading foreign currencies, but there are many risks and advantages involved.
For starters, the market for foreign exchange is enormous. There are over 100 times more trades than

the New York Stock Exchange with nearly two trillion trades every day! In addition to the incredible

volume, Forex trading is also almost entirely speculative, which gives it somewhat of a higher risk

than some may be accustomed to. Still another large difference is that unlike trading through a

central exchange like the NYSE, the trading occurs on the over the counter or OTC market. Trades like

these are completed directly between the seller and the buyer via telephone or online. One of the

biggest differences in my opinion that can be a positive or a negative is that the trading takes

place 24 hours a day in major cities all over the world, unlike the major stock markets which close

at specific times each day.
The main trading that drives the Forex market is called currency trading which is a trade where one

currency is bought and another sold at the same moment. This act of trading is known as a “cross” in

the FX movement. Some of the most traded currencies include the US dollar, the Australian dollar, the

British pound sterling, the Japanese yen, and the European Euro, with the US dollar accounting for

almost 90 percent of all currency trading. The next most popular currency is the Euro, which is

involved in almost 40 percent of all trades and gaining popularity all the time.
The values of the currencies fluctuate daily in reaction to news reports on changes in inflation,

interest rates, gross domestic product growth, trade and budget deficits and surpluses, as well as

many other economic factors. This is the reason you will see those who are highly involved in Forex

trading following the news reports very close and staying on top of breaking news 24 hours a day

through the internet and 24 hour cable news channels.
As you can see there are many differences between FX trading and regular stock trading and it is very

easy for a novice to lose a lot of money by not being informed. It is best to start out slow and

learn the business before investing a large sum of money.