Before we begin trading, I think it is important to understand some of the fundamental reasons why we might consider trading the Forex market in the first place. These might be summarised into four main areas.
Forex gives us a global trading opportunity, twenty four hours a day.
Tons of liquidity - lots of traders and massive volume.
Narrow spreads - bid to offer usually small.
The market shows price movement and volatility.
Unlike any other market, the Forex market trades 24 hours per day, so there is an ample trading opportunity no matter where you live in the world. The Forex market trades from Sunday evening until Friday afternoon (in the UK) for 24 hours each day (Sunday 5.00pm EST to Friday 4.00pm EST -New York). The Forex market has no central exchange and operates through a global network of banks, corporations and individuals trading one currency against another. These price fluctuations are then transmitted around the globe for all of the traders to see and access via their computer screen.
The Forex market is the most liquid of all traded markets equating to a sum in excess of 3000 billion dollars per DAY traded. This is more than all the major stock markets in the world added together! A truly giant global market.
As the market is so huge, the spreads between the buy and sell price (known as the bid to offer) are incredibly narrow. Whilst each trading platform has different bid to offer prices, they are all relatively small for the individual trader. We will discuss these spreads in a later article.
Forex gives us a global trading opportunity, twenty four hours a day.
Tons of liquidity - lots of traders and massive volume.
Narrow spreads - bid to offer usually small.
The market shows price movement and volatility.
Unlike any other market, the Forex market trades 24 hours per day, so there is an ample trading opportunity no matter where you live in the world. The Forex market trades from Sunday evening until Friday afternoon (in the UK) for 24 hours each day (Sunday 5.00pm EST to Friday 4.00pm EST -New York). The Forex market has no central exchange and operates through a global network of banks, corporations and individuals trading one currency against another. These price fluctuations are then transmitted around the globe for all of the traders to see and access via their computer screen.
The Forex market is the most liquid of all traded markets equating to a sum in excess of 3000 billion dollars per DAY traded. This is more than all the major stock markets in the world added together! A truly giant global market.
As the market is so huge, the spreads between the buy and sell price (known as the bid to offer) are incredibly narrow. Whilst each trading platform has different bid to offer prices, they are all relatively small for the individual trader. We will discuss these spreads in a later article.
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