Forex Currency Trading

Currency Exchange – Forex Mamma

Types of Forex Trading

The spot Foreign Exchange market-known commonly as Forex, FX or Spot FX-is the world’s largest financial market, with over $4 trillion dollars traded each day. Unlike the New York Stock Exchange, which trades shares in products and companies, the Forex Exchange trades money. More specifically, traders use Forex to trade different currencies with the goal of earning money off the rising and falling exchange rates.

Forex is popular for a number of reasons. However, one of the biggest advantages that the Forex market offers traders is a 24-hour market, as opposed to the Stock Exchange’s 9 to 5 hours. Currency values are changing constantly all around the world and Forex traders can get online to trade virtually any hour of the day. Therefore, it’s the perfect investment for people who want to trade part time. Forex is also traded over the Internet with no commissions, no middlemen, low costs and a number of other benefits.

Virtually any world currency can be traded on the Forex market. However, some currencies are more popular with traders than others. The most popular currencies are the United States Dollar (USD), the Euro (EUR), the Japanese Yen (JPY), the British Pound (GBP), the Swiss Franc (CHF), the Canadian Dollar (CAD), the Australian Dollar (AUD) and the New Zealand Dollar (NZD). Part of the reason for this is that a good portion of the world’s Forex traders are located in these countries, so these traders’ home currencies are almost always at one side of the exchange rate.

When it comes to Forex trading there are a number of options. Two of the most popular types of Forex trading include Mirror trading and Manual trading. New Forex investors will most likely turn to mirror trading, through which traders can mirror the strategies of successful investors. An advantage to this type of trading is that your buying and selling can occur on an automatic basis, so you don’t have to be tied to your computer keeping an eye on the market day and night. You can choose a strategy in which you will buy a certain currency when it hits a certain rate and sell it when the rate rises or drops a specific number of points, or pips.

More experienced traders in the Forex market prefer manual trading. With manual trading you can have more control over your personal account, making decisions on your own rather than mirroring others or buying in to the decisions of your Forex broker. If you are making Forex your primary source of income and plan to keep your eye on the market for much of the day and night then manual trading is great. You can get online and buy or sell at any hour of the day.

When it comes to manual trading there are two types of trading analysis. These trading types include fundamental analysis trading and technical analysis trading. With fundamental analysis, a trader makes his decision to buy or sell based on the economic, social and political forces that effect the currency market. For instance, if a country is doing well the trader can deduce that they will continue to do well and the value of their currency will rise. This trader would buy. The trader that buys and sells based on technical analysis studies the movement of currency prices in charts and graphs. Some Forex traders swear by fundamental analysis alone, while others swear by technical analysis. However, the best type of Forex trading strategy is one in which fundamental and technical analysis are combined for the best results.

If you are new to the Forex market then you will have to choose the type of Forex trading that works best for you. Whether you choose Mirror trading, Manual trading, fundamental analysis, technical analysis, or a combination we are sure you will find the Forex market one of the most exciting trading markets.