Why invest in foreign exchange?

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Why invest in foreign exchange?

Here are some facts:

 

  • The foreign exchange market is the largest in the world and the most liquid.
  • $3 trillions of trade per day, and getting bigger
  • Open 24 hours on business days, so you can trade night or day five days a week
  • Little capital needed, you are in business if you have $300 to $500
  • You can trade in all market condition, during economic boom or in recession
  • You can trade at home or elsewhere, so long as you have a computer and internet connection.
  • You can practice under real condition until you are ready.

The foregoing are reasons enough to invest in foreign exchange. But it is also misleading because it will make people think they can make money the easy way. The optimism can quickly turn into disappointment when the results are not as expected. The reason why things do not happen according to expectations is that the investor is not prepared and has little understanding of the basic concept and principles of the business. He has little idea of long term and short term strategies, how to trade systematically, how much to buy at any one time, or to sell, and many other things.

Foreign exchange in a few words

Here are some basic and elementary facts about the workings of the foreign exchange market and things you should know before trading in the foreign exchange market. One currency is exchanged for another at a certain exchange rate. The currency that you are buying is called the quote currency, and the currency you use to pay is the base currency. Quotations are always in pairs, so one cannot exist without the other. The exchange rate is your way of knowing how much you will spend to buy the base currency. Exchange rates change or fluctuate due to economic and political factors. When you buy the base currency and sell the quote currency, then you are said to be buying long. You are buying short when you are buying the quote currency and selling the base currency. You buy one currency on the expectation that the exchange rate will change and you can sell at a profit. The change however should be in your favor, otherwise you lose. That is the element of risk. The possibility of losing is always present and real in every transaction, so you can end up losing all your investment. The first rule therefore is to invest and put at risk only what you can afford to lose.

Choosing a Forex Broker

There are a lot of Forex brokers out there, both good and bad so you should do some serious research before you sign up for anything. If you are looking for a good and reputable Asian Forex broker then Juno Market is your best option. They have all the latest industry tools and are the leaders in Asia, and you can read any Juno market review online and you will see that people have only good experience with this company.

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