The forex market is the largest capital market in the world, with an
average of $5.3 trillion worth of currency transactions made each
trading day. Although exchange traded currency futures do exist, the
vast majority of this forex trading is conducted over the counter, which
means transactions are executed through a computerized network of
banks, brokers and market makers instead of on a centralized
Trading currencies in the forex market does not have to be as difficult
as one might have been led to believe. A solid, well defined trading
strategy can make the process much easier on the trader if they are
familiar with it and comfortable using it in a disciplined manner.
Point and figure charts, unlike just about any other type of chart used in
forex analysis, are not based on the exchange rate’s action over time
but are drawn exclusively based on the exchange rate of a currency
When it comes to currencies, the process of hedging a foreign currency
exposure means taking a position in the forex market that fully or
partially offsets the risk inherent in the original exposure. This sort of
forex trading is considered prudent currency risk management by a
corporation rather than speculation.
Successful forex trading typically involves managing profits and losses
wisely. Ideally, for most traders, these should be large profits and small
losses. Having a sound money management component in a trading
plan helps ensure this is the case, and hence an understanding of
well-established money management techniques is essential for most,
if not all, successful forex traders.
Trading in the forex market can be extremely lucrative for those with the
proper tools and the knowledge and discipline to use them. These tools
generally give the trader clear signals for entering and exiting the
market with a profit. The key to successful trading is in keeping that
A CFD or Contract for Difference is a financial derivative that does not
expire. It consists of a contract between a CFD provider and a
speculative trader to exchange the difference between the price the
contract is initially dealt at and the price that the contract is eventually
closed out at.
Candlestick charts have become an invaluable resource for traders
since their invention in Japan in the 1700’s. This type of chart has
provided Western traders with insight into the future direction of
markets since becoming popular in the West in the early 1900’s.