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5 Things You Must Know Before You Trade the Forex Market |
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| Publisher: |
Mo Caffoor |
| Date: |
2008-04-19 |
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Forex trading can be a very lucrative home business – a business that only requires from a few minutes to a few hours a day, depending on what kind of trader you are.
You can very easily make for example, $300 per day but at the same time you can just as easily lose $300 or more.
The trick in trading the forex market is judging when to enter and what your risk / reward ratio should be.
Here are my tips to help you minimise your risks:
1. ONE CURRENCY PAIR. Stick to trading ONLY one currency pair. For example the GBPUSD pair. Don’t try and trade many pairs at the same time until you become quite good at one pair. Study this pair, treat it like your baby until you get to know the ins and outs of it. Check its mood, how it reacts to news and trading times.
2. TRADING TIME: Using the GBPUSD example, we know that this pair is most active from around 6AM GMT till about 4PM GMT. European markets open at 6AM GMT and London market opens at 7AM GMT with the US market coming in at 12 NOON GMT. So this means there will be a lot of volatility during these times. Best time to trade
3. TREND: The Trend is your friend… a very important rule… see what direction the pair is moving in and enter trades ONLY in that direction
4. TIMEFRAME: If you are day trading, I would suggest the lowest timeframe to look at should be the 1 hour timeframe… any lower could lead to a lot of noise and false breakouts.
5. RISK/ REWARD : Only enter trades where you feel the reward / risk ratio is at least 1:1 , preferable a higher ratio.
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5 Things You Must Know Before You Trade the Forex Market Keywords: |
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Forex Trading Business Working From Home 5 Things You Must Know Before You Trade the Forex Market Day trading Finance |
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Related Article:5 Things You Must Know Before You Trade the Forex Market |
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Mark Alex |
2008-03-04 |
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Title: Forex vs S&P 500: Which is better to trade?
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Question: I just wanted to know which market is the better market to trade and why - The S&P 500 or the Forex market? - Marc Adelman Answer: Marc that is not an easy question as it is more a matter of taste. Lets look closer… 1. For starters both offer very high leverage. 2. Both require a small amount of money to trade. For example some forex firms will let you trade a full size forex contract for about $1000 - $1200. Similarly many futures firms will let you trade 1 emini futures contract for $1000 - $1200 of margin. Please note that margin requirements vary from firm to firm. 3. Where they vary quite a bit is in daily volatility. What I mean is that on any given day in say the British Pound/US Dollar there can be a 70 -150 pip average range for the day. That means the market will move in one direction $700 -$1500 during the course of the day. Now take an average SP 500 emini day. Most days the range will be between 5-10 points. Since each point equals $50, the daily movement is between $250 - $500. So you can see there is a huge difference in volatility. The reason why volatility is so important is that it creates movement which offers the potential to make more dinero. 4. Now don't get too excited as this volatility is a double-edged sword. Extreme and rapid volatility can lead to very unexpected large movements against your position. 5. You always see brokers saying there is no commisions but that is not entirely true. You see each time you enter a trade you pay the spread. This is the difference between the bid and asking price. In some of the major currency pairs the spread will be 3 pips. If a pip is worth $10 then your account will immediately be debited the value of the 3 pips spread($30) each time you place a trade. The spread can be 4, 5, 6 or more pips at times as well. Now take the emini SP contract. Many brokers now charge less tha $5.00 round turn. Round turn refers to the cost of entering a trade and then exiting it later on. So the cost of trading the eminis are way less. 6. The forex market is often touted as a strong trending market. Yes that may be true if you are looking at dailiy and weekly charts, but there is a lot of intra-day noise on charts like 5, 15 30, and 60 minutes. 7. I also notice a lot of wild intra-day price spikes in the forex. This is often due to market professionals running stops on novice and under capitalized traders. The SP also has it's share of stops getting hit. 8. An advantage to the forex is it is open more hours. This is great for traders who can't get enough of it. 9. When it comes to trading emini futures I personally prefer the emini Dow and emini Nasdaq as I think they produce smoother charts. 10. Something I really like a lot about forex is that you can open an "mini" account for around $300. This is not possible in the SP as there is usually a $5,000 minimum to open an account. The mini forex account is also great practice without the huge risk as each pip is worth just a $1 11. Another thing that is important is you have to like trading the market. For example, some people live and breathe the S&P 500 market only and wouldn't consider trading anything else. But… If it doesn't get you fired up, then pick another market that does. 12. Another difference between the forex and SP futures is the "cost of carry". In the forex if you want to short the market and hold it for more than a day their is the "cost of carry". This is a daily fee you pay to hold the currency. The fee is roughly 1/2 a pip per contract per day. Not that much but id does add up if you are trading multiple contracts and holding for a lot of days. Now if you buy the currency and hold over night you actually get paid the same rate as the cost of carry. So overall it equals out. In the SP you have no "cost of carry". Obvioulsy there are pros and cons to each market and one isn't necessarily better than the other. It really boils down to what suits your risk tolerance, profit goals, trading style etc. Peace & Prosperity! If you would like to learn a very profitable Forex Trading System and discover how to become a successful forex trader then please visit our website at http://www.SmartForexSystem.com
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Murtaza Khan |
2008-02-10 |
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Title: The Cost of Forex Trading
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The forex trade is going to be the buzzword for the future and it holds enormous opportunities for the investors in the forex trade. In the earlier days of the forex market the requirement of the capital for the investment was quite big most of the times running into millions of dollars. The size of the investment kept the common investor out of the forex market for quite long. After the internet boom forex market also went through lot of changes and the requirement of the minimum investment to participate in the forex trade dropped considerably, making it a feasible area for the small investors. At present the scenario is as such that, if you want to work at home with a great earning potential you should seriously think about learning the ins and outs of forex trading, one of the most profitable activities anyone can enter into due to its generous characteristics that set it apart from other capital markets at the present time. Forex markets are very active markets in nature which are open 24-hrs a day except the weekends. It’s a global market so you can trade from any where in the world round the clock and you will always find profitable trades that will make your earnings grow in a stable manner. You have the US market then the European and then the Asian forex markets. Each one of them appears on the forex trade zone one after another. One of the great times to trade is during the over lapping periods. The USA and European forex markets overlap between 5am and 9am EST and the European and Asian forex markets between 11pm and 1am EST. The overlap periods are usually the busiest and best time to trade in the forex market. After the opening up of the forex market for the small investors you can open a forex trading account with a forex broker for as low as $300. In order to be successful in forex trading you need to learn the tricks of the trade. Forex trading is a very complicated and speculative market and for better understanding you need to have a good knowledge of how markets behave and what influences this behavior to be able to use it in your favor to earn handsomely. The worst thing you can do is to enter the world of forex trading without proper knowledge and this can cost you a lot of money in bad trades. In the worst case scenario you could lose what’s in you account. But you would have to do something really stupid for that also. To help you out from the difficult scenarios lots and lots of expert advice is available on the net. To prepare you to cope up with the actual trading scenario many sites are there on the net that provide you with the demo or the free practice account. By using these accounts you can really prepare yourself to earn some profits in the real forex markets. There are many factors that contribute to the price fluctuation in the currencies and if you are vigilant enough you would be able to sail over the problem period quite nicely and would be able to log in a nice amount of profit. The forex trade is getting popular among the small investors due to the requirement of very small capital and barring the risk factors of the market, the ability of the forex market to provide ample scope of earning sizeable profit by the investors. There is no need to be afraid of the forex market, only thing required is the proper knowledge about the forex market. The latest foreign exchange and currency information for investors, traders and travelers. Forex Invest features; online foreign currency trading platform, currency payments, Forex info and more! Sign up now!
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Han Ming |
2008-01-10 |
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Title: Trade FOREX Online
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The best place to trade FOREX is through the internet. There are lots of advantages of online FOREX trading. The internet is a secure and user-friendly environment. You can trade whenever and wherever you're online by visiting websites of FOREX trading companies. The internet allows you to do online FOREX trading in real time. This means it is kept updated so you can know about the market changes in just minutes or even seconds. You can make reports of your progress and loses as you trade; therefore filing documents is easier and much more convenient. You can also download software in the internet that simulates the market and gives you simulated money to improve your strategies. Online FOREX trading can give you so many other benefits. It is more convenient compare to other methods in trading FOREX. All you’ve to do is just open the software and you can start trading immediately. Or even better, you can just login into your account in FOREX website and start trading immediately. You can check all your past transactions, add funds into your account and start trading. You can do everything in just one account. Sometimes, you can even get up-to date information about FOREX trading on the internet and this gives you competitive advantage if you know how to use the information successfully. If you're just a beginner or a novice in trading FOREX, try to trade with the trend. This increases your odds on winning and can ensure you a profit. It is wise to have two FOREX accounts. Use one for demo account to train and learn new strategies in the FOREX market and use the real accounts for the other one. This is beneficial from a novice FOREX trader to intermediate FOREX trader. Remember that FOREX trading is a continuing education, even after you finished taking a course on FOREX trading, you will still be learning on the real market. There are so many benefits in online FOREX trading. That is why more and more people are trading their currencies online. Easy forex is an online trading platform gives lots of free valuable tools. You can start trading instantly at a very low cost. However trading forex involves risks, easy forex will not be responsible for the losses incurred by forex traders. Visit online forex trading or go to http://genuineforextrading.com to trade at lowest cost
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Article Writer |
2007-09-04 |
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Title: Get the Right Forex Training to trade well in forex market
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Currency trading in forex is beneficial. It is because of the fact that the market is marked with possibilities and potentialities. However before landing in forex or opening a trading account, you should have a clear concept of what the forex market is all about, how to act here and when to remain silent? Questions of the same genre may be more but the answer to all questions is perhaps one i.e., sound forex training. Yes, a forex training is always beneficial for a trader before playing cards in forex market. A few more facts about forex trading are mentioned below: There are two ways through which you can track your forex training program namely online way of forex training and traditional classroom method of forex training. Before having an insight into the latter one, let’s mull over the first i.e., online method. Well, online method of forex training is rapidly garnering popularity for the flexibilities it offers to user. Just a click and you can enter into the portal of world’s best online forex trainers. Many websites do offer free forex training program. These tutorials on forex are informative and filtered by experts of forex domain. Here you can even open a free demo account to explore how to trade in forex market without investing real money. Add to this, the online portals seek to inform users about every details occurring in the forex market every minute. Traditional classroom method of forex training is also worthwhile. Here you get the chance of eye to eye chatting. You can reveal your queries better and get the answers precisely about the forex market and trading. Such forex training can be accessed from your local college campus or schools which are dedicated to currency exchange training program. You can even find books on forex training and forex market preferably from your local library. Opting for a traditional forex training classroom could be a good approach for a newcomer to get loaded with basics of forex market. Both the methods of forex training are worth mentioning. However before selecting any of these two, make sure the training program suits all your needs. Check out whether it deals with basics and fundamentals of forex market, see whether it teaches you the risk control measures of currency exchange. A good forex training program should address the techniques to cut your losses while trading in forex market. You should also learn how to open and manage a forex trading account. Except course curriculum, you should also do a bit of research about the teacher. Find out the history, achievements and reputation of the training company you are opting for. If possible ask experts about a reputed forex training company. All such efforts will help you to go for the best and learn the secrets of a sound forex trading. A good forex training program should address every important particulars relating to forex trading. For more details you can visit at http://www.ac-markets.com .
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Article Writer |
2007-09-03 |
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Title: Learning for Earning: Get the secrets of forex training program
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For a trader, forex is perhaps the best place to start a trading career. And why not? Forex with all its flexibilities has proved to be the largest trading market in the world having an average daily trade of US$ 2 trillion and above. A trader with a lust for trading can strike gold in forex. But forex trading is not only about playing cards and waiting for what you are destined for. A lot of things from your part decide your success in forex trading. And to gain that success its better to have forex training before you land on the currency market. As far as the topic of forex training is concerned, you have many masters at your disposal. But few of them are according to the context. Now being new to the forex and World Wide Web, you may find yourself confused enough to find out a suitable forex training program. In such a case, you can consider the following: Select a forex training program which addresses the forex trading basics from root. Basics are good to make your stance strong. Review the basic concepts like margin, rollover, order types, bidding etc. Having a sound understanding about the fundamentals of forex can help you to manage all your deeds at ease. Except basics, you should also be aware of the mistakes which are very often made by forex traders while trading in forex. A good forex training course should give its students an insight into all possible or probable mistakes of trading in forex. Once you know how to stop committing mistakes in forex, you will become quite confident about your forex trading. Select a course that focuses on both technical and fundamental analysis of forex trading. Add to this, while pursuing a forex training program, make sure you have understood the concept of money management in forex. Money management helps to increase your profit and limit your losses. You should also know how to handle the psychological barriers which affect the forex trading decisions to a great extent. Except the aforesaid, choose a training course on forex which is dedicated to install the habit of success in every trader, who is going to enthrall the forex. Habit of success may include the ability to understand the discipline, taking responsibilities, being unwearied and committed towards task etc. Before trading in forex, considering a forex training that features the above may help you to gain substantial profit in forex. With the advancement of World Wide Web, you could know a lot about forex, forex trading and forex training courses. Choose the right course, ask yourself whether its au fait and address imperative particulars about forex. A well trained trader has the potential to fetch profit in forex. Forex is perhaps the best place to start a trading career. Visit www.ac-markets.com for forex training program which addresses the forex trading basics from root .
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Forex Training School |
2007-04-05 |
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Title: Course On Forex Trading
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Course on Forex Trading
The term used to describe the trading of the currencies of the various countries of the world is called foreign exchange, forex or just FX. More than 1.5 trillion USD worth trade activities are conducted in the worlds largest forex market. The forex trade is not conducted by a central exchange unlike stock trading. Telephone or electronic networks are used to connect the two counterparts all over the world to make a trade. Moreover the forex market offers several advantages over equities trading.
Moneymaking or wealth creation is the main goal behind any trade. The opportunities in FX are boundless and it far exceeds the slim margins and picks of other markets like equity or share trading. Moreover the risk involved is also much less and to top it all forex trading can be conducted 24 hours a day. There are always buyers and sellers available, who make this trade more liquid and stable among all others. The banks too provide liquidity to investors, companies and institutions.
Just like any other financial instrument forex trading also involves a deep analysis about the fundamental and technical truths associated with the trade. Keeping in mind the general interest of traders looking forward to invest in forex, many forex trading courses are available. The main aim of this Forex Trading Course is to impart the necessary knowledge about the fundamental procedures and tips on better and professional trading policies.
Forex trading courses offer valuable information related to the impacts on global currencies, market risks, market trends etc. it not only benefits the new trader who wants to set foot on alien grounds, but also the existing investors who wish to brush up their tricks of the trade. All the aspects of the forex trading, using the latest software’s and tools are what the Forex Trading course material is comprised of. Step by step guidance on trade environments, technical analysis, risk management, trading rules, global markets, economic and market indication etc are provided along with the hands on practical guidance from the experienced tutors from all around the globe.
Many factors are to be considered before you make a decision to do forex trading. ‘Knowledge is power’ for all our daily diplomatic living. Knowledge on what we do and how we do, especially trading will not only enhance our business dealings but will also allow us to differentiate and track down market conditions. Managing our finance wisely will save us the fear and anxiety about our unpredictable and meek future. Forex trading courses often outline these basic business strategies in their course material.
Forex trading courses are available as online courses and also through printed books. Free tutorials and financial guidance is also provided by many web sites. Choosing a professional Forex Trading Course will provide you with details on
• The best time to trade specific currencies like Euro
• How to anticipate movements and trends in the global market
• Which pairs of currency to trade
• Best time to enter the forex market
• Market conditions and tips about efficient trading from experts
• Technical indicators
Overall a forex trading course should be a complete currency trading solution for all the queries regarding forex and its effective trading options.
The article is Written By Forex Training School which is specialized in offering Forex Training Course.
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2008-05-04 |
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Title: Getting The Best Results With Your Forex Course
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The word "Forex" stands for foreign exchange. Forex trade deals with pairs of currencies. Unlike other markets, Forex trade is the largest and holds high potential for investors and retail traders. A Forex course may provide a systematic approach to Forex trade, its intricacies, its patterns etc. Forex Course A course on forex trade helps the individual investors understand the market and perform well in earning profit. The course includes systematic analysis of the data pertaining to the trade in the past and the vital indicators in the area of GDP, production etc, pertaining to the country. This technical and fundamental analysis gives the investor a fair sight about the market, depending on which, strategies can be formed for making money out of the market. As a part of the course, the trader is exposed to online forex trading, which gives tremendous confidence to the retailer. Online Forex Trading Normally, Forex trading by retail traders is done through brokers. The brokers pprovide access to the purchase and sale of the currencies as per the request. With the advent of modern communication equipments and computer peripherals today you can enter the market from the comfort of your home. A large part of what has created this access is made possible through recent developments in internet technology. Forex trade is a 24 hour market, with one country or the other in the world participating in the trade. The online market is a spot market in the sense it settles instantly. Us dollar (USD), European Euro(Euro), Japanese Yen (JPY), Swiss Franc (CHF),UK Pound (GBP), Canadian Dollar (CAD) and Australian Dollar (AUS) are the frequently traded currencies in online forex trading. In every transaction two currencies are involved, one is bought and the other is sold. There are many online Forex websites, which should be understood before actually doing online trading. Unlike conventional trading, online trading does not require the direct assistance of brokers. What a broker would be doing otherwise by receiving and placing/executing the orders, the system will do automatically and istantly in online forex trading. At the click of the mouse, the transaction is completed/executed. The online trading system is very fast and reliable. Cross Currency Cross currency is a currency pair in which the two currencies are not USD. In other words, the two currencies are currencies other than USD. The cross currency is more liable for fluctuation because actually in cross currency transactions, the purchase currency and the selling currency are converted in to USD first and then the trade is completed. So, knowledge about cross currency transactions will enable a Forex trader to profit even when the U.S. Dollar pairs are not trending. Similarly, one should be aware of the base currency (the first currency in a currency pair), which helps take vital decisions. Online Forex trading is a relatively new development that provides conveneint access to traders worldwide. With wireless internet access traders can now execute their trades from virtuall anywhere in the world and enjoy a lifestyle of freedom and mobility.
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2007-09-05 |
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Title: Getting The Best Results With Your Forex Course
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The word "Forex" stands for foreign exchange. Forex trade deals with pairs of currencies. Unlike other markets, Forex trade is the largest and holds high potential for investors and retail traders. A Forex course may provide a systematic approach to Forex trade, its intricacies, its patterns etc.
Forex Course
A course on forex trade helps the individual investors understand the market and perform well in earning profit. The course includes systematic analysis of the data pertaining to the trade in the past and the vital indicators in the area of GDP, production etc, pertaining to the country. This technical and fundamental analysis gives the investor a fair sight about the market, depending on which, strategies can be formed for making money out of the market. As a part of the course, the trader is exposed to online forex trading, which gives tremendous confidence to the retailer.
Online Forex Trading
Normally, Forex trading by retail traders is done through brokers. The brokers pprovide access to the purchase and sale of the currencies as per the request. With the advent of modern communication equipments and computer peripherals today you can enter the market from the comfort of your home. A large part of what has created this access is made possible through recent developments in internet technology. Forex trade is a 24 hour market, with one country or the other in the world participating in the trade. The online market is a spot market in the sense it settles instantly. Us dollar (USD), European Euro(Euro), Japanese Yen (JPY), Swiss Franc (CHF),UK Pound (GBP), Canadian Dollar (CAD) and Australian Dollar (AUS) are the frequently traded currencies in online forex trading.
In every transaction two currencies are involved, one is bought and the other is sold. There are many online Forex websites, which should be understood before actually doing online trading. Unlike conventional trading, online trading does not require the direct assistance of brokers. What a broker would be doing otherwise by receiving and placing/executing the orders, the system will do automatically and istantly in online forex trading. At the click of the mouse, the transaction is completed/executed. The online trading system is very fast and reliable.
Cross Currency
Cross currency is a currency pair in which the two currencies are not USD. In other words, the two currencies are currencies other than USD. The cross currency is more liable for fluctuation because actually in cross currency transactions, the purchase currency and the selling currency are converted in to USD first and then the trade is completed. So, knowledge about cross currency transactions will enable a Forex trader to profit even when the U.S. Dollar pairs are not trending. Similarly, one should be aware of the base currency (the first currency in a currency pair), which helps take vital decisions.
Online Forex trading is a relatively new development that provides conveneint access to traders worldwide. With wireless internet access traders can now execute their trades from virtuall anywhere in the world and enjoy a lifestyle of freedom and mobility.
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2007-07-23 |
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Title: Forex Market Hours
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The Forex trading market is unlike some of the other trading markets. The Forex market stays open and moving twenty four hours a day.This allows the traders to trade at any time, and the long waits until the market opens do not happen in Forex like they do in the stock market. One thing that successful traders will learn, however, is the right, or optimum, time to make the trade. This aspect of the market hours is very crucial to a market trader in terms of success.
The Forex market may stay open twenty four hours a day but it is better to trade when the market is active, as there is more activity and chances to make a profitable trade during the active times of the market. An active market translates into a bigger volume of trades. This means that there are more active currency moves when the market is active, and this will create a better chance of catching a trade that makes a profit. When the market is very calm and slow, most Forex traders consider it a waste of their time to trade.
The Forex market is open around the clock, and this is because the four major Forex markets are open at different times. The major markets are the New York market, the Tokyo market, The Sydney market, and the London market. The New York market is open from eight in the morning to five in the afternoon Eastern Standard Time. The hours for the Tokyo market are from seven in the evening to four in the morning Eastern Standard Time, and for the Sydney market they are from five in the evening to two in the morning Eastern Standard Time. The London market hours are from three in the morning until noon Eastern Standard Time. This means that both the New York and London markets are open from 8 a.m. until noon EST, the Sydney and Tokyo markets are open from 7 p.m. until 2 a.m. EST, and the London and Tokyo markets are open from 3 a.m. until 4 a.m. EST. The times when these markets overlap, and are open at the same time, there is the highest volume of trades and the best chance to realize a profitable trade.
The Forex market is open twenty four hours a day, but specific markets have set trading times. The four main markets in Forex are London, Tokyo, New York, and Sydney. By understanding the specific hours each market trades, a Forex investor can make a better profit from trading currencies. The times that are overlapping between these markets offer the best chances for great trades in the Forex market. This is because the market is more active with a greater volume of trade, which translates into more profitable trades.
Copyright © 2007 Joel Teo. All rights reserved.
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Ali Jamalan |
2006-07-18 |
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Title: What Is Forex Or The Forex Market?
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The Foreign Exchange market (also referred to as the Forex or FX market) is the largest financial market in the world, with over $1.9 trillion changing hands every day.
That is larger than all US equity and Treasury markets combined!
Unlike other financial markets that operate at a centralized location (i.e. stock exchange), the worldwide Forex market has no central location. It is a global electronic network of banks, financial institutions and individual traders, all involved in the buying and selling of national currencies. Another major feature of the Forex market is that it operates 24 hours a day, corresponding to the opening and closing of financial centres in countries all across the world, starting each day in Sydney, then Tokyo, London and New York. At any time, in any location, there are buyers and sellers, making the Forex market the most liquid market in the world.
Traditionally, access to the Forex market has been made available only to banks and other large financial institutions. With advances in technology over the years, however, the Forex market is now available to everybody, from banks to money managers to individual traders trading retail accounts. The time to get involved in this exciting global market has never been better than now. Open an account and become an active player in the largest market on the planet.
The Forex Market is very different than trading currencies on the futures market, and a lot easier, than trading stocks or commodities.
Whether you are aware of it or not, you already play a role in the Forex market. The simple fact that you have money in your pocket makes you an investor in currency, particularly in the US Dollar. By holding US Dollars, you have elected not to hold the currencies of other nations. Your purchases of stocks, bonds or other investments, along with money deposited in your bank account, represent investments that rely heavily on the integrity of the value of their denominated currency ¨the US Dollar. Due to the changing value of the US Dollar and the resulting fluctuations in exchange rates, your investments may change in value, affecting your overall financial status. With this in mind, it should be no surprise that many investors have taken advantage of the fluctuation in Exchange Rates, using the volatility of the Foreign Exchange market as a way to increase their capital.
As an example, suppose you had $1000 and bought Euros when the exchange rate was 1.50 Euros to the dollar. You would then have 1500 Euros. If the value of Euros against the US dollar increased then you would sell (exchange) your Euros for dollars and have more dollars than you started with.
The way to represent a pair of currencies for exchange is as follows: EUR/USD last trade 1.5000; this means One Euro is worth $1.50 US dollars.
The first currency (in this example, the EURO) is referred to as the base currency and the second (/USD) as the counter or quote currency.
The Forex plays a vital role in the world economy and there will always be a tremendous need for the exchange of currencies. International trade increases as technology and communication increases. As long as there is international trade, there will be a Forex market. The FX market has to exist so a country like Germany can sell products in the United States and be able to receive Euros in exchange for US Dollar.
Currency Trading and its Risks:
Margined currency trading is an extremely risky form of investment and is only suitable for individuals and institutions capable of handling the potential losses it entails. An account with a broker allows you to trade foreign currencies on a highly leveraged basis (up to about 400 times your account equity). 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. Given the possibility of losing one's entire investment, speculation in the foreign exchange market should only be conducted with risk capital funds that, if lost, will not significantly affect the investor's financial well-being.
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