FOREX and Currency Futures

Ever wonder why the fOREX market has become so popular among investor?

Its because you can trade from anywhere in the world. You can execute you trades from the kitchen table, bedroom, or from the nearest deli or coffeehouse. All you need is a computer,an internet connection and a forex software trading application.

Another positive aspect of forex trading is you dont have to have any formal training,a college degree is not required nor do you need a license or diploma. What you do need is a basic understanding of economics and a good forex trading software.

Forex trading software application use algorithmic trading which is most commonly known as automated forex trading. Other commmonly used terms are algo trading, black-box trading, or robo trading. Automated trading is the use of computer programs for entering trading orders with the computer algorithm deciding on certain aspects of the order such as the timing, price, or even the final quantity of the order.

Not much capital is required to open a forex account. You can open a forex account with as little as $200 at most brokerage firms.

There are many forex trading platforms that offer state of art Trading. It is my recommendation you use a platform that allows you to place orders directly by clicking on the chart.

The foreign exchange market is unique because of:

Its trading volumes,

The extreme liquidity of the market,

Its geographical dispersion,

Its long trading hours: 24 hours a day except on weekends (from 22:00 UTC on Sunday until 22:00 UTC Friday),

The variety of factors that affect exchange rates.

The low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)

The use of leverage

FOREX (SPOT FX) and Currency Futures.

Forex SPOT FX

Foreign exchange spot trading is buying one currency with a different currency for immediate delivery, rather than for future delivery. The standard settlement timeframe for Foreign Exchange Spot trades (except in the case of the Canadian dollar and the Mexican Nuevo Peso, which settle the next day), as opposed to the futures contracts, which are usually three months.

The Spot FOREX market runs continuously on a 24-hour basis from 7:00 am New Zealand time Monday morning to 5:00 pm New York Time Friday evening.

Dealers in every major FX trading center (Sydney, Tokyo, Hong Kong/Singapore, London, Geneva and New York/Toronto) ensure a smooth transaction as liquidity migrates from one time zone to the next.

In spot FOREX, an investor can trade in almost any currency denomination, you may trade electronically any desired amount and up to $10 Million USD.

With Spot FOREX, you may trade foreign currencies vs. USD or vs. each other on a 'cross' basis, for example: EUR/JPY, GBP/JPY, CHF/JPY, EUR/GBP. An investor can trade in almost any currency denomination.

Most currency futures are traded only versus the USD. The Spot FOREX market offers constant liquidity and market depth much more consistently than futures.

Currency Futures

In finance, a futures contract is a standardized contract, traded on a futures exchange, to buy or sell a standardized quantity of a specified commodity of standardized quality (which, in many cases, may be such non-traditional "commodities" as foreign currencies, commercial or government paper [e.g., bonds], or "baskets" of corporate equity ["stock indices"] or other financial instruments) at a certain date in the future, at a price (the futures price) determined by the instantaneous equilibrium between the forces of supply and demand among competing buy and sell orders on the exchange at the time of the purchase or sale of the contract.

Foreign currency futures are exchange traded forward transactions with standard contract sizes and maturity dates — for example, $20,000 for next April at an agreed rate. Futures are standardized and are usually traded on an exchange created for this purpose. The average contract length is roughly 3 months. Futures contracts are usually inclusive of any interest amounts.

The futures market is similar to the stock market,it also closes at the end of the business day. If important data is released overseas while the U.S. and the futures markets is closed. The next day's opening might sustain large gaps with the potential for substantial losses. That is if the direction of the move is against your position.

More well informed investor and entrepreneurs are diversifying their traditional investments like stocks, bonds & commodities with their forex trading due to the risks of currency trading. Currency trading is an extremely risky form of investment. It is most suitable for individuals and institutions capable of handling the potential losses it entails. An account with an broker allows you to trade foreign currencies on a highly leveraged basis. Where else could you get up to approximately 400 times your account equity? You can on the FOREX. NOw that is leverage! The funds in an account that is trading at maximum leverage may be completely lost if the position(s) held in the account experiences even a one percent swing in value. It is possible oflosing one's entire investment. But on the flip slide there is a potential to make a handsom return on your money. Speculation in the foreign exchange market should only be conducted with risk capital funds that, if lost, will not significantly affect the investors financial well-being.

All CFD Traders aim to make money from CFD Trading and to be successful CFD Trader and they all can be successful. They must have a great strategy to help them gain profit and avoid loses. As a CFD trader there are six very simple steps that you can follow to help you become a more successful CFD Trader.
As a CFD Trader you must be realistic. Your goals must be attainable so that you can easily achieve them. An example if you are starting with $5000, don’t expect to make $1,000,000 per month as this is unrealistic however if you aim to make $1000 per month this is achievable.
Make sure you have a great CFD Trading plan and trade the plan, never move away from this.