Suzette's World

Many people see the forex market as their last hope to earn big money and begin the process of firing their boss. Others have switched from the trading stocks to currency for the sheer purpose of control over their investment. Most people who trade stocks don't know anything about the instruments except what they learn about in the mainstream news media.? And some experts would tell you the news media get it all wrong. Even Warren Buffet, the monarch of investments, warns you not to buy stocks but buy the companies that offer them. That is, if a company has good management it is more than likely the share price will increase over time. But with poor management you just don't know when your investment will take a tumble.

Now this doesn't mean the forex market is all cherry picking. Currency trading does not directly depend though on? a specific company or inept management. But George Soros, rebel investor, single-handedly caused serious gyrations in the currency market that gave many governments grief. This means you can go to bed one night with a multimillion dollar currency portfolio, and get up the next morning to find that your broker sent you a margin call. So, your account lost its entire value, and then some, overnight.?

Perhaps these are isolated incidents in an organized forex market, but you need to protect your portfolio from wild swings. Violent market trends can also come when one government devalues its currency, or when several countries merge their financial willpower to form a trading bloc. This happened when the European Union was formed and the new kid on the block, the Euro, rushed past the US dollar, and is still ahead now.

So what is the impact of such a move in the forex market. Well, if you were holding US currency when the Euro passed it, you would have lost some value in your portfolio unless you were betting against the US dollar. Yes, you can either hold a currency in the hope that it will increase in value over other currencies, or you can bet on it losing value against more aggressive monetary units.

However, the one thing you shouldn't do is sit still waiting for the forex market to decide. Once you begin trading currencies you have to keep up with world news or local news surrounding the currencies you trade. But it doesn't mean you should be checking your trades every minute on the hour. Unless you are a daytrader, you would likely only need to check your trades once a week.? Some traders set up their trades and watch them over longer intervals.

The currency market is opened for 24 hours, 7 days a week, but the exchanges where the trades are managed keep regular business hours. This means you can trade anytime of the day that suits you. So there is no need to quit your job before you know that you can earn a comfortable living as a trader. Also, there are times when trading volume declines and this could affect you trades and profits on the forex market.