The largest financial trading market on the planet is open 247. It has no central exchange. Boasting the most competitively priced markets. Yet very few investors choose to trade it, despite being a tax free opportunity In the UK. This market is the foreign Currency market, also known as forex or FX.
Whenever you go on holiday or travel you will trade currencies at some stage. But currency trading presents an excellent alternative to trading shares. Unlike trading shares currencies are trading in pair by spread betting or CFD you are backing one currency against the other so in the Forex market you never have a up or down scenario because either one of the currencies is winning whilst the other is losing.
Spread betting and CFD trading allows you to profit from the price changes of your chosen current pair by using margin: your spread betting Bookmaker or CFD broker is loaning you the Majority of your trade by only requiring you to deposit a fraction of it, your margin. This presents a unique opportunity FX trading, because currencies mainly change incrementally against one another on a daily basis.
Take the GBP/USD: whilst the £ might strengthen over the $ during a period of, let’s say, a month, from 1.507 to 1.543, this is obviously a 36 point change. If trading using a financial spread trading account, at £2 per point, you’ have made around £72. Luckily financial bookmakers quote fractional changes to the forex rate, one decimal point further to the right. This means you might see the GBP/USD price move between 1.5442 and 1.5581 in a single day.
Because of this you now have a daily trading range of 139 points, a lot more promising from a spread betting view. Take that further, let’s say, out to a month, and you can see moves of 300+ points.
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