This article is written by Ruben Paul : erfahrung zulutrade
Forex is an abbreviation for foreign exchange; forex trading is the trading or buying and selling of currency around the world. Each country has its own currency which fluctuates in value on a hour by hour basis; forex trading involves buying various foreign currencies low and selling at a higher price as the market fluctuates in the trader's favor. There are thousands of investments out there that you can favor, so why go trading foreign currencies instead?
Forex investment is one of a kind investing in many ways. Forex investing is a business arena where large fortunes can be made in a matter of hours:
Its trading volume is huge compared to other markets.
It has great liquidity or the ability of either buying or selling the currency without causing significant increase or decrease in the market price.
It has the most number and various kinds of traders.
It is a market that has long trading hours (24 hours each day, except during Saturdays and Sundays )
Places to trade are almost everywhere, not just in America or cities of Europe, but everywhere in cyberspace.
There are different facts that affect foreign exchange rates.
Another interesting fact that will make you excited about Forex trading: it has an average turnover in traditional foreign exchange markets of around $1.80 trillion daily, according to the Triennial Central Bank Survey of the BIS (Bank for International Settlements). Here are some daily averages of turnover on the Forex market in the past years:
$500 billion (April 1989)
$750 billion (April 1992)
$1.18 trillion (April 1995)
$1.48 trillion (April 1998)
$1.16 trillion (April 2001)
$1.88 trillion (April 2004)
From the above figures alone, you will notice that the average trend of Forex turnover is increasing. It is estimated to go as high as 1 to 3 trillion dollars within the next 7 to 12 years, if the amount of traders around the world
continues to increase. As a matter of fact, everyone has the chance of getting a large piece of the Forex market wealth pie, because the Forex trading marketing process is now on automation process.
The concept of automation has become the new trend to the foreign exchange trading markets. The Interbank spot Forex market is also considering changing to the automated method as well.
There are many benefits that a Forex trader can get from automated Forex trading. Here are some such benefits why Forex trading as well as other investments (futures and commodities) prefer the automated process.
Through automated process,trade transactions can now be done in real time. Although slow manual systems have existed for quite some time now, it is difficult to achieve such benefits the automated Forex system can offer to its users. All of the transactions can happen within a few milliseconds and can be a huge bonus for automated transactions against the manual system. In fact, there are problems that are corrected using automated Forex trading ,specifically if the trader is losing a few times in a row the system stops him from making new trades. Such problems could be corrected using the automatic trading system.
With automated Forex trading, you will have a greater trading opportunity. It means that you can trade in many markets in different time zones at a time. You can perform trades with traders from Singapore or London even if it is 12 midnight in the United States. This benefit lets you do a multiple exchange model option. You can use differing trading models to evaluate short-term information. This means that you will be able to predict the trend for a shorter length of time, let us say from 15 minutes to half an hour.
As said before, the Forex market is different because of its great liquidity. This liquidity gains quickly when the market goes automated.
Risk management problems become no problems through automated Forex trading. International checks, which are usually used in making purchases on Forex market, are synchronized using automated technology. Since the trade in an automated process is now on real time, there is a no chance that the payments will be delayed,thus reducing the risk of non-payment by either parties. Although there are minor problems noted with the use of the automated system, it can be repaired quickly through consistently-updated technologies.
With automated Forex trading market, the prediction of $1-3 trillion average daily turnover within the nest 8 to 12years can be changed within the next 3 to 6 years. Given the fast yet efficient trades on different time zones, automated Forex trading will now quickly rank high among the existing lucrative businesses around the world. Is it a cyberspace goldmine? Depends on how you make your claim and work your mine.
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