Forex Market Overview
The forex market is the main product which currency traders use to make their money. It is also the most traded financial market in the world. It is also an arena where major monetary decisions are made.
This economic instrument is very different from other markets in many aspects, namely in how it is traded and its liquidity. We will look at each of these key attributes below.
Chart of the Week – A Look at the Forex Market
A look at the weekly charts of the euro shows that on Monday, February 13th the euro made a low of $1.1578. This was the first time in a couple of months that the euro breached the upper end of its weekly cloud pattern. The chart of the euro goes up to a high of $1.1813, where it just made another minor lower low.
The Forex Scam
The Forex market is a lot like any other stock market except that you only buy a certain amount of a currency. The market trades in units of one currency against other currencies. So, for example, if I want to buy $200 worth of a currency, I will have to first buy 100 units. I will then have to sell the rest of the 100 units. When you buy the currency for $200, you will be buying 100 units.
The scammer is offering to buy your currency units for a cheaper price. They will buy it from you for a lower price and will then sell it at a higher price. You will be buying 100 units at a rate of $200 while they are selling it for $300. The scammer then pocket the difference of $100 and make huge profits.
How to Spot a Scam
You don’t have to be a mathematician to spot a scam – all you have to do is keep your wits about you and your money safe from fraud. Here are some signs to watch out for:
1. Company name is not very memorable – If you are just starting out and don’t want to fall for an expensive scheme, it’s best to stick to established brands or companies. Some of the more popular ones are ones such as Forex21, TradeKing, Foreign Exchange Bank, FXCM, and so on. These companies are reputable and have been around for some time.
2. Advertising is unsophisticated – If the advertisement you are reading doesn’t look professional and if the claims it makes in the description don’t match what you read in the description, it is better to avoid this business altogether.
What are the Best Forex Brokers?
That’s a good question to ask yourself. The best brokers come in the form of dedicated brokers who offer excellent services. What these brokers do is provide you with a trade engine (like GDAX for Bitcoin) that runs 24×7 and ensures you never lose money in the process of trading. The best brokers have numerous advantages to make your forex trading experience enjoyable and profitable.
1. Low-Volatility
For novice traders, market movement can be scary. Since there is a lot of money involved, there are chances of making losses. So when you trade with low-volatility brokers, you are guaranteed to make easy money. What makes low-volatility brokers so good? Let’s see.
Low-volatility brokers basically limit their losses and limit their exposure to market movement.
Conclusion
The major advantages of trading forex over investing in stocks are the direct relationship with the currency and the convenience of the market trading. Forex is also ideal for beginners because it requires very little knowledge, a computer and internet access. The Forex market also offers a low barrier to entry, even if you are not a high school graduate or have no experience, you can start trading and can expect to see a pretty good return. Be sure to invest your money in a regulated forex broker to avoid unnecessary trading losses.
Where to begin
It is not impossible to get started trading forex with a small amount of money. However, I recommend you start with a brand-new account with a reputable forex broker, and then invest in one to three funds or trading pairs.