How can I learn Forex trading?
In terms of money traded, the Forex market is the largest financial market in the world. It’s a global market. Liquidity in the market is unparalleled, with prices often more predictable as a result. With more than 4 trillion dollars traded every day, it is larger than all of the stock markets of the world combined. It is a 24 hour market, open 5 days a week – 120 hours in total.
That means you can trade the market at a time convenient to you, whichever time zone you live in. On a stock market, you may have several thousand shares to choose from. With many different stock markets around the world, this results in tens of thousands of companies. With currencies, you have a handful of currencies to trade. Volumes traded on each currency are huge and a single trader won’t influence the price. The Forex market has only been open for business for “at home” traders since widespread adoption of the internet and broadband. Your first decision is your level of participation.
Analyst or trader?
Analysts analyse and report. Their involvement is based on knowledge and theories, for example, economics and global trade. It can be learned in an academic environment. Traders DO. They are practical. Traders involvement means making decisions, as opposed to providing choices. Traders are practical and learning has to take place against a practical backdrop,
Is trading for you?
Major banks are large players in the Forex market. The have analysts to review market data and professional traders at the sharp end, making trading decisions. Businesses are players in the Forex market too.
When BMW want to import parts for their factories, they need to arrange the currencies to pay for them. Some businesses have traders to provide hedging operations, which offer some degree of stability in pricing for the business. Central banks and governments play a role in the markets deciding currency strategies, through setting interest rates and economic policy. Speculators are the final group. These include the professional traders in hedge funds and retail and amateur traders taking FX trades in the market. In a market with many professional traders, it is important to align yourself alongside the professionals in the way you approach trading. As trading is a practical skill, it is not something to learn from a book.