There is a lot to learn when you decide to start currency trading. The currency trading market is called the Foreign Exchange Market, the Currency Market, or most commonly, the Forex. This is one of the largest markets in the world. It is traded on 24 hours a day, 7 days a week. The market is, for the most part high risk, and the more a person knows about Forex, the more successful they will be in trades. This short article cannot begin to give you all of the information you need to begin trading. Even currency trading for newbies will require time and study to accomplish.
Enter e-Currency Trading. In simple terms e-currency is Internet Money. E-Currency allows the purchase of Internet goods and services at lightning speed and most importantly with a high level of security. Much higher than credit cards, bank transfer etc. The demand for e-currency should only grow as Internet Commerce grows.
Traders try to predict fluctuations in the exchange rate and bet on the pairs that will give them the largest gains on their bet. When one country's currency is being traded against another country's currency, it is call a "pair". All of the major pairs that are traded involve the US dollar. When a currency pair is being traded that does not involve the US, it is called a "cross currency pair." An example of a cross currency pair would be EUR/JPY (Euro/Japanese Yen). The most actively traded cross currency pairs are the EUR, JPY, and the GBP (sterling pound or British currency).
The same basic strategies apply to e-currency trading as with futures trading. Supply and demand dictates price primarily. You could buy e-currency that has historically performed well (buying the trend) or go the opposite way and buy those that are under-performing, looking for a turn-around. You can even chart them if you like.
Leverage, that double-edged sword that Futures Traders are so familiar with is also present in e-Currency Trading. You can borrow against your portfolio to buy more e-currency. The compounding affect is almost outrageous. Some would argue that you never have to pay back the leverage. I contend that it is paid back if you closed your e-Currency account, because your final balance would be less the amount leveraged. The point here is the leverage in futures trading is often times the demise of a well intended trader versus the leverage afforded an e-currency trader combined with the daily compounding affect creates portfolio growth at a phenomenal rate. It is not uncommon to see portfolio growth of 20 - 40% per month.
Futures Trading and e-Currency Trading have a common downside. The learning curve is huge and can be frustrating and costly. Each has unique terminology, which is impossible to work around until you have a good understanding of the meaning. Thankfully in this world of information, we are able to find resources online and offline that shorten that curve. How much it is shortened is dependent on how much time you want to dedicate. Industry experts have debated for years the optimum amount one should fund their futures trading account with. The obvious moving target is enough capital to withstand the drawdown periods. Many factors go into this but Ive seen numbers range anywhere from $10,000 to $50,000 and up. If this is the case then there is little doubt why most futures traders lose as most are willing to fund only the amount required to cover Margin or the Brokers account minimum usually a few thousand dollars. One of the biggest reasons for small business failure is being under capitalized, the same holds true in futures trading.
Enter e-Currency Trading. In simple terms e-currency is Internet Money. E-Currency allows the purchase of Internet goods and services at lightning speed and most importantly with a high level of security. Much higher than credit cards, bank transfer etc. The demand for e-currency should only grow as Internet Commerce grows.
Traders try to predict fluctuations in the exchange rate and bet on the pairs that will give them the largest gains on their bet. When one country's currency is being traded against another country's currency, it is call a "pair". All of the major pairs that are traded involve the US dollar. When a currency pair is being traded that does not involve the US, it is called a "cross currency pair." An example of a cross currency pair would be EUR/JPY (Euro/Japanese Yen). The most actively traded cross currency pairs are the EUR, JPY, and the GBP (sterling pound or British currency).
The same basic strategies apply to e-currency trading as with futures trading. Supply and demand dictates price primarily. You could buy e-currency that has historically performed well (buying the trend) or go the opposite way and buy those that are under-performing, looking for a turn-around. You can even chart them if you like.
Leverage, that double-edged sword that Futures Traders are so familiar with is also present in e-Currency Trading. You can borrow against your portfolio to buy more e-currency. The compounding affect is almost outrageous. Some would argue that you never have to pay back the leverage. I contend that it is paid back if you closed your e-Currency account, because your final balance would be less the amount leveraged. The point here is the leverage in futures trading is often times the demise of a well intended trader versus the leverage afforded an e-currency trader combined with the daily compounding affect creates portfolio growth at a phenomenal rate. It is not uncommon to see portfolio growth of 20 - 40% per month.
Futures Trading and e-Currency Trading have a common downside. The learning curve is huge and can be frustrating and costly. Each has unique terminology, which is impossible to work around until you have a good understanding of the meaning. Thankfully in this world of information, we are able to find resources online and offline that shorten that curve. How much it is shortened is dependent on how much time you want to dedicate. Industry experts have debated for years the optimum amount one should fund their futures trading account with. The obvious moving target is enough capital to withstand the drawdown periods. Many factors go into this but Ive seen numbers range anywhere from $10,000 to $50,000 and up. If this is the case then there is little doubt why most futures traders lose as most are willing to fund only the amount required to cover Margin or the Brokers account minimum usually a few thousand dollars. One of the biggest reasons for small business failure is being under capitalized, the same holds true in futures trading.
About the Author:
Frank Miller has a Debt Consolidation Blog & Finance, these are some of the articles: Want To Know About Debt Consolidation? Read This You have full permission to reprint this article provided this box is kept unchanged.