Trading FX Moving from theory to practice PDF Print E-mail

Kel Butcher shows you how to place your trades and factors you must consider in a live trading environment.

Making the move
According to the Bank for International Settlements (BIS) in its April 2010 triennial survey, the average daily turnover in the FX markets has increased from $3.3 trillion in April 2007 to just over $4 trillion in April 2010. This daily turnover is greater than the combined turnover of all global equity markets. That massive liquidity and the free movement of prices are the greatest attractions of the FX market to traders, and more and more retail traders are displaying a growing interest in the Foreign Exchange (FX or forex) markets. Statistics from the BIS that further reinforce the growing interest in the FX market among retail traders show that turnover in the spot FX market has increased from $1.0 trillion in the 2007 survey to just under $1.5 trillion in the 2010 survey – an increase of 48 per cent! As a result, turnover in the retail FX market now accounts for 37 per cent of the average daily turnover in the FX market. Little wonder that FX is ‘hot’ at the moment. Associated with increased interest in FX is a rapid escalation in the number of courses and training programmes designed to help people learn about and participate in the FX market.

In this article we look at some of the important points you need to consider before entering the market. We discuss how new traders who choose to begin their trading in the FX markets can move smoothly from theory to practice. We also show how someone who is already a share or CFD trader can make the transition to trading FX; and we examine the many benefits FX has to offer over more traditional trading instruments like shares and futures...

Excerpted from an article originally published in the Sep/Oct 2011 issue of YourTradingEdge magazine. All rights reserved. © Copyright 2011, Your Media Edge Pty Ltd.
If you are a subscriber to YourTradingEdge magazine, you will receive this article in your
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