By Cedric Welsch
Keeping your money in a bank to grow your savings with interest rates at record lows is not the financial savvy plan it used to be. A more creative and possibly productive way to make money is online forex trading. There are a couple of reasons to trade in forex but remember first and foremost that this is an international trading market with great potential.
Governments and businesses around the world import and export products and services every day and need to convert revenues to whatever their local currency is. Of course another reason is to make money by predicting quotes for currencies at a future date. Forex trading is the exchange or conversion of currencies. These currencies are bought and sold in combination.
The United States currency is the main exchange or base currency on the forex market and is what quotes are based on. Quotes in this and other monies would use a unit of $1 US along with a second currency quoted for a pair. As an example a quote of USD/JPY 101.04 would translate as one U. S. Dollar being equal to 101.04 Japanese yen.
With the U. S. Dollar as the primary unit and say the quote goes up, the translation would be that the dollar gained value and the other currency weakened. If the USD/JPY quote increase to 164.85, the dollar is more valuable because it will buy more yen.
The definition of cross currencies is pairs that would not involve the U. S. Dollar. Oil and gold are the primary factors that would influence the Foreign Exchange market. If a country is a major gold producer and the price of gold goes up so would it’s currency. A nation’s dependency on oil could influence that country’s currency in a negative way. If oil goes up that costs companies more money and less income.
The exchange market business is very liquid and fast paced. Large sums of money moves quickly in a matter of minutes, so you need to know how to make the right decision on a quote. If you’re a beginner and just getting to know the market you need to know certain definitions of keywords used in the trading business.
To be successful in the currency exchange business you need to have keen senses for changes in the market. There are risk like any other market that involves speculation. Keep updated with the market’s closing and opening rates to stay on the path to financial success.
About the Author
The semantic signals being conveyed by various forex trading news sources can be good for traders. You cannot under estimate the influence of a forex trading review to your decision making ability.
