Forex trading education - The two principle characteristics of the forex market
The Forex market has two principle characteristics:
1.
Liquidity
Have you ever bought a stock and couldn't
sell it a specific moment?
For example: you have bought a particular
stock. The stock had risen greatly in only a few months and all of a sudden the
CEO resigned, at that moment there was a pause in the trade which lasted a few
hours, and the next day the stock decreased by 10%.
you are stuck with the stock.
In the Forex market such a thing would never
occur.
If you have Euros, Pounds, Swiss Francs or
any other tradable currency, you can sell it at any point in time. You will
never get stuck with a currency. As a trader, it doesn't matter what you buy,
whats important is that at any moment you can cash in your goods – there will
always be a buyer.
There is one very important rule to remember:
until you cash in your goods, there is no knowing whether you have gained or
lost.
2.
No control by external
financial bodies
A speculator, as great as he/she is, cannot
influence the exchange rate.
Central banks intervene in the trading once
every decade and are successful in effecting the value of the currency by a
total of two percent, a moment of this kind lasts for only a few hours and then
the exchange rate returns to its natural price.
whats next?
