Forex Traders

Written by Jacey Harmon
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Forex traders are speculators who intend to profit from the change in value of different currencies. Forex trading is growing in popularity as it is already the largest financial market in the world. Forex traders are knowledgeable in both fundamental and technical analysis. There are huge leverage capabilities available for forex traders that can increase potential profits as well as potential losses.

The foreign exchange market, or forex market, has an average daily volume of US$1 trillion. The forex market is a worldwide electronic market place as there is no one single exchange floor. Instead financial centers are based around the world and are located in New York, London, Sydney and Tokyo. A trading session begins in Sydney and rotates around the world operating 24 hours a day.

Forex traders utilize a variety of research tools to research and execute trades. The most common forms are considered fundamental and technical analysis. Fundamental analysis is the study of the working behind the move of a currency. Technical analysis is the study of the move of the currency in the market place. Instead of focusing on learning one or the other a trader may find it beneficial to understand and utilize both styles of analysis.

Leverage for Forex Traders

Forex traders can take advantage of very large leverage capabilities. Leverage allows a trader to buy more of a currency with having only a small initial investment. The leverage limit for forex trading is 100:1. This means that a trader can buy 100 units for the price of one. This type of leverage increases the potential profit on a trade with a low initial investment. However if the trade works against the trader it dramatically increases the loss potential on a trade as well.


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