Forex online: The largest foreign currency trading market in the world is Forex, with over USD$4 trillion traded daily.
It is cheap to trade in Forex; usually you do not have to pay commissions or fees to your broker.
You can start with a small amount of capital and tight bid/ask spreads that means that the difference between the buying price and the selling price is generally very small so you won’t lose money in that spread.
The Forex market is very accessible, it is open 24 hours and is online so all that you need is a computer with internet access to be able to trade. Forex online is a highly leveraged market which allows you to trade large amounts with a small deposit. So to trade for example $100,000 you will need to deposit $1,000. That means the broker offers 110:1 leverage.
The advantage is that you can make a substantial profit; but the disadvantage is if a position moves against you, the broker will call you for more money to cover the losses and if you are not able to pay you will lose the position and the deposit.
Some advantages of trading in Forex are: liquidity, you are always able to trade, plenty of free resources: analytics, charts, paper trading, demo accounts, trading platforms and software, and it is very easy to get started because you do not need a large amount of money to start.
The way you enter or exit a trade In Forex online trading is by making an ‘order’ and there are different types of orders:
– Market orders: Is a type of order that an investor makes through a broker or brokerage service to buy or sell an investment instantly at the best available current price, It means that you will buy or sell regardless of the price, that means that you may end up losing money if you sold at a certain price and that price continues to hike up.
– Limit orders: This type of order is placed to buy below the current market price or sell above the current market price at a certain level.
– Stop-loss orders: This type of order allows you to prevent losses if the price turns against you. That means that you can set a certain price to sell avoiding losses if the currency price keeps going down.
– GFD or Good for day order: This type of order will be active in a Forex online day trading, until the end of that day.
The Forex market is a large market that allows for the traders to make money in a friendly environment with big advantages.