forex trade

The currency market, commonly referred to as the Forex (an abbreviation of Foreign Exchange), the most liquid market in the world. The most recent data says that the daily trading on Forex is more than $ 1.3 trillion U.S. dollars. Forex That makes the world's largest, most knowledgeable market. A large part of the reason for the liquidity and volume of trade is the practice of day trading. The main difference between day-trading and other forms of trade (such as stocks or futures) is how long your investment. In the world of day trading, you do nothing after the end of the day the market, so everything is fluid. Think of it as a game where the goal is to swap cards back and forward, increasing the value of your cards, but you have no cards in your hand at the end of the day.

Of course, since the foreign exchange market is a 24-hour market, there is really no market for closing - so the system changes slightly. The currency market is open from noon Sunday until Friday afternoon, with trading happens all the time, so you can choose your period for the trade instead of being locked in the Stock Exchange timetable.

How do you make money with day trading

People will tell you that the distinction between a trader and an investor day is the length of time that each holder on their stocks. If you analyze Forex Trading deep, you know that this is a largely superficial difference. The real difference in the approach of short-term versus long-term and liquidity. An investor buys something he believes will gradually grow in value, and to the long haul. A day trader will ride the tiny changes in the currency market per minute, almost the way a surfer will ride a wave. Because you trade in lots of say 200000, a tiny difference could mean a big profit - or even a huge loss.

Limiting the loss in day trading

One of the hardest concepts for new traders to understand is that limiting loss. Let's say that you have a trade post for a currency that is because you believe that its support away from point - the point where it will bounce back and start heading back up. Instead of being so behave as you would expect, it breaks the point and keep heading down - you're lost money instead of creating it. You have two choices - hold on, because you know that it will soon start heading back up, or get rid of and control the amount of money you're going to lose. The name of the game is to limit your losses and you win as much as possible. You must also decide in advance to show how much you can lose every trade before you sell, and then stick to your LIMIT. You also need to decide how much profit you want to make at the start of trading, an order to sell when the currency reached that point, and then sell when it hits the mark.

It may sound obvious, but know what you are doing.