Off-Exchange Trading Can Bring You Rich Rewards Especially by Targeting Lower Trade Risk-of-Loss & Broker Account Drawdowns
Off-Exchange-Trading is a trading guide for FX Forex Traders...
A good date to to start trading forex currency futures markets for consistent forex trading profits is today
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This is your FX futures trading resource with explanation about how the off-exchange-trading market works, and advice on how to potentially make money trading FX-Markets. The off-exchange traded forex currency futures market is a large, fast growing and extremely liquid financial market trading day and night all year, operating 24X7.
Off exchange traded funds are not traded on a commodity futures market in the traditional sense of a futures exchange because there's no central trading location or a brick and mortar 'exchange.' Most off-exchange trading is done by phone or thru an electronic trading network (ETN). Some financial experts are saying off-exchange electronic trading platforms should have more regulatory scrutiny, especially since "Off Exchange Trading" is receiving a larger share of U.S. based currency and stock trading activity.
The primary market for currencies is the inter bank market based on the inter-bank offered rate where banks, insurance companies, corporations and large financial institutions manage the financial and trading risk related to price fluctuations in foreign currency rates. The true inter-bank market is only available to institutions trading in large quantities with a substantial net worth. In recent years, a secondary over-the-counter (OTC) market has developed which allows retail investors to participate in forex trading transactions. While this secondary market does not provide the same prices as the interbank market, it does have many of the same market and trading characteristics.
What You Need to Know to Get Started in Trading Off-Exchange and Forex Markets
The Forex, or foreign currency exchange, is all about money. Money from all over the world is bought, sold and traded. On the Forex, anyone can buy and sell currency and with possibly come out ahead in the end. When dealing with the foreign currency exchange, it is possible to buy the currency of one country, sell it and make a profit. For example, a broker might buy a Japanese yen when the yen to dollar ratio increases, then sell the yen and buy back the American dollar for a profit.
The Forex and the stock market have some similarities, in that it involves buying and selling to make a profit, but there are some differences. Unlike the stock market, the Forex has a much high liquidity. This means, much more money is changing hands everyday. Another key difference when comparing the Forex to the stock market is that the Forex has no place where it is exchanged and it never closes. The Forex involved trading between banks and brokers all over the world and provides twenty-four hour access during the business week.
Another difference between stocks, the stock market and forex is the fact trading has significantly higher leverage vs stocks and the stock market. When traders trade the fx forex markets they can expect much higher profits when profitable trades conclude. However, there can also be major potential for bigger loses, more broker account equity drawdowns and losing far more money overall, so always use a resting stop-loss order on every FX trade.
For those who are just getting started in the Forex, many brokers provide the service of trading using the mini-forex system. This has a smaller margin minimum deposit, usually below $1,000. This makes it easier for those learning how to trade on the Forex to have a lower chance of losing lots of money and to learn how their trading system works.
There is a lot of terminology when dealing with the Forex. Learning to trade on the Forex can be somewhat complicated for the novice trader. When looking at the names used in the Forex, a symbol is composed of two parts. The first one that is used is one currency and the second half of the symbol is the second currency that is being used. The symbol “usdjpy” means “US dollars” and Japanese yen. It is important to learn what currency symbols mean when learning about the Forex. There are many books and websites dedicated on teaching traders about using the Forex.
For those using the Forex, a broker is usually a good idea. A good professional commodity broker can be invaluable when it comes to trading on the Forex markets and their experience is a great resource, especially to the new fx trader. When it is time to find a broker, there are several factors to consider. One thing to look for when choosing a Forex broker is to go with someone that offers low spreads. The spread is calculated in pips, or the difference between the price at which currency can be purchased and the price it can be sold at any given time. Because Forex brokers do not charge a commission, they will make their money off of the spreads, or the difference. When choosing a broker, look at this information and compare that with other brokers.
Also, when looking at a Forex broker, look for one that is backed by a well known financial institution. Forex bankers are generally associated with large banks or other types of financial institutions. If a broker is not with a large bank, keep looking. In addition, find a broker that is registered with the Futures Commission Merchant (FCM) and that is regulated by the Commodity Futures Trading Commission (CFTC). Making sure that the broker is properly registered and backed by a large bank or institution ensures that you are getting a reliable broker that is experienced in trading on the Forex.
When looking for a broker, check to be certain that the broker has access to the latest research tools and data. It is important that brokers understand and have access to charts, graphs, news and data that are in real time. This will ensure that the broker is making wise decisions based on accurate Forex forecasting. Also, look for a broker that can offer a wide range of account options. They should offer mini-accounts with a smaller minimum deposits and a standard account. This will give anyone interested in the Forex the opportunity to trade at a level where they feel most comfortable.
A Forex Demo Shows you How it Works
Before airplane pilots actually fly on their own, they usually practice in simulators that re-create what flying will be like without any actual risk. Since currency trading is as dangerous financially as flying is physically, it makes sense that there would be a forex demo available, too.
A forex trading demo account is a smart way for a new FX trader to get started. Reading books and taking online courses can teach you the basics, but the best way to learn anything is to get some hands- on experience. However, with forex, hands-on experience could mean losing your shirt. So a demo gives you real-world training with no actual money being involved.
Usually, the demonstration comes courtesy of a brokerage or other financial Web site that has an interest in currying your favor. The plan is that once you've tested your skills in the demo, you'll get into the real thing and take advantage of the paid services the demo provider has to offer -- forex signals, managed accounts, automated trading, etc. The demo is like a free sample, offered in the hopes that you'll enjoy it so much that you buy something, too.
For that reason, be should be highly suspicious of any Web site that wants to charge for a demo. Considering there are literally dozens of sites that offer free demonstrations, there is absolutely no reason that you should pay for it.
When you sign up for a forex demo, you're given a user name and password and shown how to use the demo system. Sometimes it involves downloading a piece of software unique to the company; other times it's simply done over the Internet. (Some demos require Macromedia Flash, which most browsers have installed, but which you'll need the latest version of.) You determine how much imaginary money you want to start with, and off you go!
Once you're signed in to the forex demo, you do all the things you would do if it were a real-world situation: reading the charts, following the trends, visiting online forums to get other traders' opinions, and making trades. The trades are recorded in the forex demo only and don't go anywhere into the actual market since there's no real money involved. When the market changes, the program determines how much you'd have gained or lost based on the decisions you made. You're able to say, "Whew! Good thing this was only for practice!" or "Too bad this wasn't real!" And once you've gained some expertise using the FX demo, you can move on to the real thing and potentially start making real-money!
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