How to Boost Your Forex-Trading Skills

How to Boost Your Forex-Trading Skills

“There’s a sucker born every minute.” That quote, often attributed to P.T. Barnum, is a fitting description of the forex market and the people who trade it. At first glance, how could you take a market seriously where currencies are bought and sold based on nothing more than “up” or “down?”

The answer is you can’t, or at least you shouldn’t. But what if I told you that the forex market isn’t nearly as risky as most traders believe it to be? Would you have a reason to stay away?

Of course not! The forex market is massive, even more so than the equities market.

The estimated annual turnover for the foreign exchange market is around $3 trillion, compared to an estimated $22 billion for all U.S.-based equity transactions.

With figures like that, it’s no wonder that forex has become an attractive proposition for traders with big ambitions and even bigger egos: “Why work at McDonald’s when you can be a successful currency trader and make millions in only a few hours a week?”

How to Improve Your Forex Trading Skills

So what should you do? Simple: Stay away from the forex market. Sorry, I’m just kidding. There’s no way to get around it because while forex has its pitfalls if you can overcome them and take advantage of the opportunities that exist in the market, it’s all good.

Whether you’re want to do some classic day-trading, or you’re looking at using a commodities trading platform in Jordan, we can help you improve your skills. Here are a few things to keep in mind to help you increase your chances of success:

  • The U.S. Dollar is King (but so Are Every Other Currency)

No matter how much we might like to think that America is “number one,” when it comes to currency trading, there’s not an American coin – let alone bill – insight. That’s because the vast majority of currency trading happens in two places: New York and London.

The volume of currency traded is gauged by the number of foreign exchange transactions that take place every day (the total amount of dollars, yen, pounds, and euros involved).

In 2000, a whopping $1.5 trillion changed hands on an average day; today that figure has increased more than six times to approximately $10 trillion – this might not include dark pools or trades made offshore. But as much as 80% of those trades take place outside the U.S., meaning the American economy simply doesn’t move currency markets like it used to.

  • The Foreign Exchange Market Is Global

While Americans might be thinking about how our own currency’s strength affects us when we travel abroad, it’s just a tiny part of forex trading. In fact, most currency trades these days are related to international trade and investment – not Americans buying European vacations or Japanese cars.

  • Your Forex Trading Strategies Should Be Global Too

If you want to get in on the action, you have to think globally too. Don’t focus on only one country’s strengths or weaknesses. One of our top commodities trading strategies is based around an American company that benefits from a strong U.S. dollar. dollar because half of its sales take place overseas!

As currencies fluctuate across borders, your investments should follow suit – not just your stock portfolio, but also your commodities futures trading strategy. For instance, if oil prices suddenly drop which would weaken the U.S. dollar, you could bet that the prices for European currencies would also fall because oil is traded in U.S. dollars on world markets – and that’s when you’d make a killing!

  • It Isn’t Just About Currencies Anymore

In fact, most forex traders do less than 10% of their trades in the spot currency market. There are too many fun things that happen that prevent currencies from moving the way you’d expect them to.

For instance, economic reports can cause an unexpected surge or slump in a currency’s value. When the U.S. Labor Department releases its jobs figures, it often has an immediate impact on stocks and bonds – which means it’ll affect foreign exchange prices as well!

  • Knowing Your History Can Be Half the Battle

So much about forex trading is about predicting what will happen next, but because so much happens every day, you really need some stock options training. The best way to go about this is by studying history: How has a particular currency behaved over time?  If you know the history of trading between two countries, it’s not too far-fetched to forecast what will happen when something triggers a particular reaction.

For example, if investors are continually selling U.S. stocks because they anticipate that China’s economy is about to collapse, then an unforeseen boost in Chinese exports might cause traders to buy back into American stocks – which would increase the value of the U.S. dollar!

Armed with this information, you can use your commodity futures options trading strategies for greater success by anticipating how certain events will affect forex trading trends and using them to your advantage.

In Conclusion

Forex trading is not for everyone. It’s a lot more volatile than other forms of investing, and it takes some training to really get your feet wet – which is why we’ve created this blog. Keep track of what we’re saying about forex trading here, and you’ll be on your way to mastering the markets!

For more articles, visit OD Blog.

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