Using Forex as your next financial tool

*This content is sponsored by CMC Markets, a forex trading platform

Massive portals such as CMC Markets are known as being some of the most efficient ways to take advantage of the liquid Forex markets. Many insightful investors are now choosing such instruments to dramatically increase their wealth and enjoy a sustainable income. Should you be considering a venture into this exiting sector, there are a handful of key facts to appreciate. Let us examine some interesting observations that will shed additional light on such a liquid marketplace.

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Appreciating the Big Players

Trading on the Forex exchange obviously involves noting the proportional movements between discrete currency pairs. However, a lesser-known fact is that the “big seven” represent no less than 85 per cent of the total trading volume. These pairs are:

  • USD/JPY
  • GBP/USD
  • EUR/USD
  • AUD/USD
  • NZD/USD
  • CAD/USD
  • USD/CHF

Thus, focusing on these benchmark currencies (particularly the dollar, the euro and the pound) is the best way to begin accruing wealth over time.

Watching the Major Players

The Forex market is heavily influenced by the decisions made in the upper echelon of the banking community. It therefore stands to reason that wagering against their movements will almost always result in a certain loss. Keep in mind that the top ten banks control an impressive 80 per cent of the entire Forex market share. The main players here are Deutsche Bank, Citi and Barclays Investment Bank (1). Following these establishments closely is always a wise decision.

Sticking to a Strategy

One of the most common mistakes for novice Forex traders to make is to spread themselves too thin in regards to a specific investment strategy. This can result in a lack of focus and ultimately, trades in the negative. Therefore, it is prudent to experiment with different methods until you find the one which works best for you. Once this has been determined, hone your skills until you have gained the confidence to begin real-time trading.

Compounding Small Gains

Success equates to conglomerating small profits over time as opposed to embracing an “all-or-nothing” approach. This has been the hallmark of prominent traders for decades. Any modest gains made can quickly be placed back into a specific currency pair. This also helps to eliminate monumental losses.

Finding the Correct Broker

The broker chosen will inevitably impact your Forex experience. Not all are created equally and each brings different tools to the table. While even the trading platforms themselves may be similar, factors such as customer service, mobile access and spreads are additional concerns to be addressed before making a final decision. Another issue is the fact that some may not be as connected to major market makers. This will dramatically lessen the chances for real profits.

Forex trades are powerful financial tools for novices and professionals. These suggestions should always be followed in order to begin down the path to fiscal freedom.

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