What You Must Know About Forex Trading

source: http://www.abhishek-solutions.com

Let us try to find out some interesting facts about forex trading. We have been writing on forex trading considering the fact that more and more people are interested today as this is becoming a good way to make some extra money. However, before you get into forex trading you must read this article in order to understand the concept of forex trading better.
     
     The currency trading market is the biggest financial market in the world.
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    The foreign exchange market is regulated by global demand and supply of the currency you are trading in.
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    The forex trading can be done by anyone with an internet connection.
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    Most of the forex trading is done by individuals only.
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    The large number of participation into the forex trading has lead to many myths about the forex trading in the past. It makes it easy to enter but to be successful you must master the tricks of the trade. 

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     You need to do the forex trading with the help of a broker. You cannot do it without them. However, all the brokers are not the same. Each one is different and have own credibility. You must select a broker based on their reputation and if you can deal with them. We have discussed about how you can pick a reliable broker in our previous articles. The brokers will charge a brokerage from you. You must see the platforms that the broker is offering and also the services.
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    The best strategies in forex trading are simple strategies. You have to get the strategy that suits you the most and use the same to make money. You will come across a lot of terms and strategies as you learn the forex trading. The simple strategy would be one that you can explain to a junior high student. If the student does not understand the strategy then it will be a bad strategy.
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    You must never try to over trade. Overtrading will definitely lead to failure. Most of the new traders try to over trade in excitement. This is very wrong and must be avoided. Some new traders see the money they are making and feel that every minute that they spend away from the forex market is an opportunity lost. Well this is not. So if you try to over trade your chances of making more loss in only going to increase. Just trade as much as you can.
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    The biggest fact about the forex trading is that ninety five percent of the traders lose their investments in the first six month as a result they get disappointed and leave the forex trade. Well we do not want our readers to face the same situation this is exactly why we are writing this article. Only the five percent of the forex traders who enter the market survive over six months and make the profit that they desire.

     Of this five percent only a two percent can use forex trading to make a living. We are not trying to discourage the readers by giving these facts. We just want them to understand that the forex trading is not as simple as it seems. It is a little complex and different. Just that you need to spend time and be patient with the strategies that you are adopting in forex trading.
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    If you look at the history o f the forex trading you will notice that the traders who compound small gains survive longer in forex trading. Analyse the market and don’t look at huge gains immediately. Make small gains and slowly increase the gain figure. These small gains must be invested into the online forex trading and slowly you will be able to see the profits that you are making. 

    This will ensure that you lose less and you get your strategy right. This will also give you a good chance to understand the forex market. When you start forex trading ensure that you have a job in hand. As you become more and more confident on the forex trading you can quit your job and take up the forex trading as a main profession.
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     Banks play the most important role in forex trading. They do about seventy percent of the forex trading in a day. Deutsche bank has fourteen percent share in the forex trading market. This is followed by Citibank and Barclays. The banks use the funds of their clients for the purpose of forex trading.
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     When we talk about the forex trading we have to say that the maximum profits are in the majors. We will list the currency pairs that comprise eighty five percent of the global forex market movement. These pairs are USDJPY, USDCHF, NZDUSD, USDCAD, AUDUSD, EURUSD and GBPUSD.
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     Almost fifty percent of the global forex trading happens in two countries. It is a global market and investors from any part of the world can invest in forex trading. However, the United Kingdom is the country where thirty five percent of the global forex trading happens. 

    USA has sixteen per cent of the global forex trading and the remaining of the world shares only fifty percent of the global forex trading. The experts belive that as more and more people are gaining awareness about the forex trading the scenario may change soon and we may see some more global players in the forex trading market.
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     You must be wondering what it takes to be successful in forex trading. Well it is discipline that is no doubt the biggest attribute for a forex trader. You have to be calm and understand the pulse of the market. It will take you almost a year to master the forex trading skills. This is all that is needed. Do not get impulsive and trade slowly.

     It is ok if you make small profits. It is much better than making huge losses. Always ensure that you make a note of all that you learn. Read as much as you can about the forex trading. Make a journal that will record all the trades that you have made. This journal will be of great help in learning more about the forex trading.
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     The last on the list of the interesting facts about forex trading is that it is no doubt the biggest market. On a daily basis about four trillion USD worth of currency is traded in the market. This will help you to understand how huge the forex trading market actually is and the potential it has to make money. 

    About forty percent of these come from forex swaps. Twenty five percent comes from spot trading. Fifteen percent comes from dealer transactions and ten percent from forward transactions. About five percent of the forex trading comes from gaps.

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    We hope that you found this article on interesting facts about forex trading will help you to understand the concept of forex trading even better. These are some of the facts that we thought we must share with the readers. They will help you to understand the magnitude and the risks that are associated with the forex trading better.



           

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