What Online Forex Trading Is All About

15-02-2016 | Dojo |

If you are looking for an interesting way of financial trading for getting good returns on your investments, then online Forex trading is the one which you may find interesting.

Forex trading refers to the buying and selling of different foreign currency with the aim of receiving profits from the fluctuations in the relative price of the currencies.

There are many people who make good money through this technique of trading and the average turnover goes more than 3 billion dollars a day. Trading Forex through an online platform is known as online Forex trading and is used popularly today.

About Foreign exchange and currencies

The most common currencies which are traded through online Forex trading are Euros, dollars and Japanese Yen. Besides there are Great British Pond (GBP), Swiss Franc (CHF), Australian Dollar (AUD) and Canadian Dollar (CAD) as the major currencies being traded.

The Foreign exchange does not have a physical location or central exchange. Every country takes the responsibility of the regulation of Foreign exchange activities in their own country.

How online Forex trading is done?

Forex traders buy and sell currencies in a pair. Every currency is quoted in a pair and the price of a pair is the relative price of one currency to other. For example EUR/USD, USD/GBP etc.

When the trader trading in a particular currency pair feels that the price of one currency will rise in future with respect to other, he buys the currency which is getting strong. This means the simultaneously selling of another currency in the pair.

After some time when the price has risen to a good point, he sells back the first currency and gets profit in the form of second currency. This technique is used by the traders to grown their earnings in Forex trading.

Online Forex trading is the method by which Forex trading is done through online platforms. You just need a computer device and a fast internet connection. This technique is convenient and today most of the Forex brokers are online Forex brokers providing an online platform for trading Forex. It is easy to find a good online Forex broker and start trading Forex today.

Due to the growth of competition, the minimum capital required for online trading account opening is also very small and it is just in few hundred dollars.

Factors affecting Forex prices

There are many things which influence the Forex rates of different currencies. The examples are economic factors like interest rates and inflation, political factors like political unrest in the country, government changes and policies, central bank policies and others.

These things affect the prices for a short term but these fluctuations are well used by the fundamental traders who make trades based on the News and events related to them.

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