Forex Trading Advice – How to Make Money With Forex Trading
The foreign exchange market is a global marketplace where currencies are traded. This includes national currencies, as well as currencies of developing nations. It is regulated by a network of financial institutions and is open 24 hours a day, Monday through Friday.
Major currencies are the United States dollar, the euro, and the British pound. Minor currency pairs include the Australian dollar, the New Zealand dollar, and the Swiss franc.
To trade, you must decide how strong one base currency is compared to another. For example, if the dollar is weak against the euro, the value of the dollar will fall. However, if the dollar is strong against the euro, the value of the dollar could increase.
You can use leverage to help magnify your profits. You can also enter into private contracts to lock in the exchange rate of a specific amount of currency on a future date.
In the Forex market, there are two major trading sessions: the London session and the New York session. Both of these sessions have a high turnover. The overlap between these two sessions is a great time to trade.
As a result, the spread between the bid and ask price is typically the narrowest in these sessions. The smaller spreads means less transaction costs, which is good news for traders.
Other factors that affect the exchange rate are the supply and demand for each currency, the economy and political environment in a country, and the interest rates. These factors can vary widely.