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Currency Trading is one of the most interesting facets of the world of trading. It’s lucrative, interesting and challenging at the same time. The foundation of currency trading is same as that of share trading. You buy a commodity at a price ‘x’ and try to sell it at a price ‘y’. You pray from the bottom of your heart that ‘y’ exceeds ‘x’ by a great value. While people make statements on the ways of earning money through share trading, the decision is unanimous for currency trading – it’ll stay forever.
Learning the tricks
A lot of people wish to dive into the sea of currency trading in lieu of the profits they hope to generate. There’s a mistake they commit while trying to grasp the concepts of the game. They focus too much on its history. While it’s undeniable that learning about the ‘whom’, ‘when’ and ‘how’ of a game like this is extremely interesting. It’s also true that none of that adds to the value of a forex trader. To be a successful forex trader, you have got to get a strong grip on the concepts instead of history.
Start with the basics
Let’s compare an apple with a mango now. Our apple is share trading and mango – currency trading. What makes these mangoes a little more complex is the fact that they have to be dealt in pairs. Hard to understand? No, it isn’t. Just grasp the fact that since you’re dealing with currencies here. The basic fundamental of currency trading is that you buy a pair at a price, and sell it at another. Another distinction between the two is the way the concept of ‘short selling’ is applied. Short selling is the concept where you optimize the concept of ‘buy low and sell high’ by buying, selling immediately, and then buying again to sell later. Since forex deals with currencies, the opportunity of making money becomes two-directional.
The scope of Forex
The numbers related with forex are flabbergasting to say the least. The DAILY trading volume of FOREX exceeds around $1.5 TRILLION dollars. This implies that if 1,498,574 skilled traders draw out $1,000,000 out of the Forex every day, the amount of money left in forex would still be more than the New York Stock Exchange every day! This is just a crude way of saying that forex is literally a gold mine which has the capacity of scaring people by the volume of money involved.
The safety measures
It’s rightly said that it’s better to be safe, than dead. But one should not forget the negative ramifications of being too careful. Being too careful includes moves like applying for redundant courses on forex trading. Your decision should be backed by data, and instincts. You are a product of your choices. You should not rely on somebody else’s recommendations blindly. Try to grasp as much as you can about the concepts of currency trading by employing good and vast literature.