The Forex (FX) market utilizes a strategy of trading currency pairs. Investors look for imbalances between two currencies to gain an advantage which will lead to trading profits. Several strategies can be employed to trade in the FX market. The key is matching the situation to the proper strategy. For years, foreign exchange trading was limited to hedge funds and large corporations.
These groups kept the market to themselves because the returns on FX investments outpaced either bonds or equities. In this period, minimum investments were frequently at least $1 million.
Over the last 10 years, smaller retail traders have entered the FX market with accounts in the thousands not millions. Taking advantage of the Internet to gain access to data, smaller traders can now invest smaller amounts and use Internet tools to identify currency trades.
The typical FX investor trades a small number of currencies at any time, but higher risk to only being able to trade a few currency pairs. This differs from the institutional trader that spreads the risk across a larger number of positions. The key to successful FX trading is finding the right trades and the appropriate diversification. Robovest FX transforms a retail FX trader into an institutional trader.
Visit the Robovest FX blog to learn more about the Forex market.