Forex investments

Forex investment is simply trading concurrently one currency and selling of the other. Forex is one of the most widely traded markets in the world with the daily turnover of about 5 trillion dollars per day. It is one of the largest and most liquid financial markets in the world with different currency constantly being exchanged by individuals and companies. The forex market is open 24 hours from Monday to Friday, except on weekends, and depending on the time zone you are trading

HOW CAN I INVEST IN FOREX MARKET

The forex market is 24hrs cash (spot) market where currency pairs i.e. EUR/USD are traded. The financial market allows the trader to invest on pairs that produce profits over the long term. The following are ways traders can invest in forex market;

- FOREX:

In this case, traders trade one currency for the other with the aim of making profits from the difference in exchange rate and from the constant fluctuation of the forex market.

- FOREIGN CURRENCY OPTION:

This is another viable way of investing in the forex market. In this case, a trader enters a deal with another, to trade a specific security at an agreed exchange rate, on or before a predetermined date. Before or on the exact agreed date, the trader can carry out the terms of the contract; but after the time given, the contract is deemed invalid.

- FOREIGN CURRENCY FUTURES:

You can invest through the foreign currency futures as one of the ways of investing in the forex market. Investments are made through standard size and settlement dates based on the trading position. This means that there is a future date and price set aside for a specific amount of security, which are to be traded according to the deal; irrespective of what is currently obtainable in the market.

FOREIGN INVESTMENT STRATEGIES

One of the most important things a trader can do while trading the forex market is to develop an investment strategy with which to trade the forex market. Here are some of the trading strategies a trader can use

- DAILY/WEEKLY TREND:

It involves following the daily and weekly trends meaning that the trader needs to trade small and allows the trade to mature, setup a stop mechanism and plan out of target

- CARRY TRADING:

The trader buys a currency that pays high interest against the currency that has low interest meaning that each night a rollover is paid into the trader's FX account.

- FUNDAMENTAL TRADING:

For traders that are meticulous this offers the best strategy due to the fact that they take on trades that they tend to have knowledge about instead of taking risk at critically observing FX charts & indicators.

- DAY TRADING:

The trader picks the time to trade on every trading day. The forex market is 24hrs open so it's best to know the best point of time to trade.

The forex market is the market for trading currency. As the market provides the opportunities for traders that risk the advantage of moving

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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