Currency Trading


Getting to know and understand currency trading is important for someone that’s looking to embark on trading the world’s largest market. One distinct difference between currency trading and other financial markets is that Forex Trading does not have a centralized exchange. Forex trading also does not have a centralized clearinghouse where transactions are processed. In currency trading transactions occur between major banks and institutions. The prices that are set by these banks and institutions is also known as the Interbank market.

Currency trading brokers which gear more towards a retail market have now taken the data the streaming prices of the Interbank market and broadcast to their clients. What advantage of currency trading especially that on the retail level is that there is no physical exchange of the currency.

It is also important that one get familiar with some of the common terms used to describe the various currencies.

GBP- is also known as cable, Sterling, pound

USD – is also known as the greenback

Aussie- refers to the Australian dollar

Yard- refers to 1 billion units this is usually a term that is to describe trading volume.

And understanding of forex trading and these basic terms can help you as you embark on trading the forex market.

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Trading Forex and Derivatives carries a high level of risk, including the risk of losing substantially more than your initial investment. Also, you do not own or have any rights to the underlying assets. The effect of leverage is that both gains and losses are magnified. You should only trade if you can afford to carry these risks. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary.

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