Currency Trading

What is currency trading?

It’s when you buy and sell currencies, when you exchange one currency for another. Among the years people have traded currencies to use it while traveling within different countries or as an investment.

What is a currency?

It’s a reflection of the economical situation of the country it represents.

When you trade currencies, you are trading two different currencies, which means you are dealing with two different economical situations of two different countries. The amount of variables is too big and hard to predict, that’s why currency traders analyse economic reports and financial news to collect information about the currencies they are trading with, attempting to predict its future price movement.

The variables that affect the currency prices include:

·       Price of major currencies
·       Politics/geopolitics
·       National Deficits
·       Economic Data
·       Unemployment Data
·       Inflation
·       Natural disasters

Short Trading vs. Long Trading

Considering that the Financial Market is always fluctuating, it doesn’t matter if you contemplate that the price of a specific currency is going to decrease or increase. When you trade currencies, you can benefit from every variation in price, up or down. You may select to ‘Buy’ (Long) if you anticipate the currency in question will gain value or ‘Sell’ (Short) if you consider the currency will reduce value.”

Trading Currencies with Leverage

Leverage is one of the most common tools used by traders, it allows you to boost your buying power. In Trading360 we can teach you how to benefit from the use of leverage and manage risks while trading Currencies.

For example:

With a $500 investment, you can open a position valued at $50,000 using a ratio leverage of 100:1.

Leverage permits you to open a position with a larger volume at a rather minor investment. It increases the risk of an investment so it should be used with high level of understanding.”