Forex Training - Forex Market Background

The foreign currency market, sometimes referred to as Forex, is a multi-trillion dollar marketplace in which numerous currencies are traded. As you may know, currencies are typically issued by a country. For example, in the United States, the currency is called the US dollar. In Japan, by contrast, their currency is referred to as the Japanese yen. Not all countries necessarily have their own currency. For example, the countries that comprise the European Union all share a common currency called the euro.

It's not just individuals who are involved with foreign currency trading, is also a lot of major banks as well as central banks of countries. Needless to say, this is an incredibly complex marketplace. Many experts agree that macro-economic data has a tendency to influence the direction in which a certain country's currency mind move relative to other currencies. What you need to understand is that there is literally 25,000 to 50,000 data points reflecting all of the known information in any given day about each country and its currency. It is simply far too much for one person to truly understand. As a result, the Forex market is heavily dominated by trading systems that are completely automated.

There are people who can literally triple and quadruple their money in a couple of days as a result of the fluctuations that take place within the foreign currency markets. By the same token, you can easily lose all of your money in a relatively short amount of time. As a result, the overwhelming majority of experts agree that you should only speculate with money that is completely disposable. That means you can lose all the money and you'll still be okay from a financial standpoint. Clearly, this is advice that very few Forex traders have taken to heart -- especially those who are brand-new to the business and who have essentially sunk their entire life savings into their new trading venture.

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Article Source: http://EzineArticles.com/expert/Jim_Johannasen/551290

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