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Opportunities are Infinite
British pound is one of the most traded currencies these days, mainly, due to the Brexit transition. Significant changes in the value of pound can be seen against Dollar, Euro and Yen. Those trading in Forex are even looking towards opportunities in Yuan and Turkish Lira. As UK adopted the no-deal position, Pound rates fell significantly in Aug2018.
New regulations were set up, recently, by the European Forex to ensemble changes in the market factors influencing Euro / Pound rates, and rules have been made to lower leverage on some currencies.
The new regulations will provide improved protection to forex traders to prevent collapse. The rules will prevent negative balance and one will have to keep enhanced margin on trade.
Forex trading involves global currency trading in different countries located across continents having different stock market timings. The time of trade at New York Stock Exchange for currency is between 9.30 am EST to 4.00 pm EST.
The markets across the world have different opening times, although, this does not mean the trade of a currency will stop if the local stock market is closed, however, when the local markets in a country is closed, trading can be exposed to unpredictable trends.
Planning is required for forex trade where the news related to retail sales figures, payrolls, unemployment, consumer price, consumer confidence, GDP and interest rates can influence forex rates.
How to avoid risks?
Trade in forex is easier if compared to stocks, but the risks are high. There can be extreme level of volatility in some currencies due to changing economic situations of a country. While the other markets remain closed, forex trading continues. The trade war of China and US has direct impact on currencies.
Difference of time zones can result in settlement risk where the currency traded in a day, may be partly dissolved later, and this can influence payments.
The major risk is that forex trade is decentralized and not limited to one market. Banks or financial organizations can trade forex and the risks of operations exist, where the organization may decline to pay.
Some of the prime currencies are held by some individual organizations or sellers, and rates of trading can get highly volatile in one day leading to substantial losses.
Transactional risks can lead to unforeseen losses and sometimes, the trader fails to bear the short term losses leading to huge loss.
This is mostly unregulated trade as there are, typically, no daily limits imposed on volume of trade, and on price.
Currently, the swing in global political and economic situations, offers greater opportunities to forex traders, although, one should carefully examine the markets before investing.
To prevent loss – set up stop – loss and average on all the trades.
Calculate the profit/loss ratio, and watch the latest news and emerging drifts in the market to predict the impact.
Basically, technology support can provide reports on complete transactions and calculate positions, gains, losses etc but one can hire a broker to get better suggestions.
To find out more about forex trading and other markets, click 99 Alternatives at (http://www.99alternatives.com).
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