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Forex trading practice

Content of Forex trading practice section:

Various systems trading instruments like equities successfully aside from forex have their structure in the market and trading environment that says to carefully open at a certain time and then quickly close within one day. Afterwards, traders have lots of leisure time to enjoy their life; they can play tennis, have a good time in a cinema, and meet with trading friends to discuss the game of the previous day. Finally, they will have their beauty sleep for 8 hours before then they repeat this routine next day at, say, 9:30AM, when NASDAQ opens.

There are several pluses in the Forex trading practice, like:

1. Powerful leverage of Forex market

The leverage is the point where Forex surpasses any other trading vehicle. For instance, $1,000 deposit gives to investor a control of $100,000 equivalent of a foreign currency.

2. No exchange fees

You pay no commissions as well as exchange fees by having a direct electronic access to the market through online forex trading platform.

3. Limited risk

You have your risk reduced considerably. The highest amount of money you can lose is the amount of currency in your forex account. So you will never face a negative balance of equity. You can also manage your risk thanks to stop-loss orders that all forex orders (up to $1 million amount) guarantee to a trader.

4. Guaranteed prices and Instantaneous Fills

You possess the possibility to have all your orders (up to $1 million size) executed instantly at a certain price. This will provide your forex trading with real-time and confident two-way quotes. Moreover, stop-loss and limit orders are insured by this price guarantee as well.

5. 24-hour market

Forex is a 24-hour-a-day market. Forex transactions occur throughout the world following the sun around the Earth, from the United States of America to Australia and New Zealand then moving to Hong Kong, the Far East, and Europe to return to the U.S. later. Even governments have very low affection and control over the direction of the forex market as far as there are a lot of various forex investors involved in trades. Forex market seems to be the best one to trade due to its 24-hour worldwide activity along with enormous liquidity. Forex is traded perfectly simple. Broker firms are able to find provide you with everything you need to trade forex.

Pricing and trading of the currencies always takes place in pairs in the forex market. You subconsciously sell one currency while buying another, still you can choose which currency pair you would like to trade with forex. For instance, in case you expect the Eurodollar price increase vis-a-vis the U.S. Dollar, then you are supposed to trade Euro/U.S. Dollar pair purchasing the Euro.

The idea of currency trading in forex is to convert of one currency into another in hope that the market price or rate change making the price of the currency you bought higher relatively to the second one in the pair. In case your expectations come true and the currency price increases you should exchange back the currency in order to fix the profit. An open forex trade or position means that a trader has purchased or sold the currency pair and holds it, but will not sell or buy back the amount of the second currency equivalent to the purchased/sold for the purpose of effective deal finishing.

The first currency of the pair is called the base currency, whether the second one is the quote currency or counter currency. The U.S. dollar is usually taken as the base currency for quotes being world's major currency and it forms pairs like USD/JPY, USD/CHF, and USD/CAD. The sense of these signs is that they quote one unit of USD per the second currency in the pair. However, there are some exceptions. Such currencies as Euro, Great Britain Pound, and Australian Dollar may have a quotation as US Dollar per another currency.

Forex quotes have their "bid" and "ask," just like any other most traded financial instruments do. The "ask" price shows you the value at which a forex market maker is ready to sell (and anyone to purchase) the base (the first) currency (e.g. USD) converting it into the counter currency. The "bid" shows the price at which you can sell (and the forex market maker - to purchase) the base currency for the certain amount of the counter one. The value at which "ask" and the "bid" differ is called the spread. Our firm prices offer you tight spreads through buy or sell quotes for each currency pair.