There are several commodities to trade in the stock market but forex trading is the most preferred. Forex trading is the trading between currencies where one currency is converted into another. It is the most lucrative and also the most volatile in the field. Probably the ease to make a big buck is what makes this so popular.
Why is Forex trading popular?
With the world becoming a global village and advancing technologies facilitating trade between different parts of the globe, companies and individuals can trade and enter into business contracts with their partners in any part of the world. To grease the wheels foreign exchange is required. While this is a practical need several trading firms and individuals deal in foreign exchange with the aim to make a profit. On an average, a trading volume of $5 trillion takes place each day in forex trading.
Automated Trading robots in Forex
Automated trading systems have made forex trading easy. Not only has forex trading become accessible to beginners with little or no knowledge of the trade but it has also proven to be a useful tool for the veterans. There are several trading platforms like the CarbonFX based on individual skill levels. All forex automated trading systems are designed to analyze the market indices and currency pairs and identify the most profitable currency pairs before trading on them.
What are currency pairs?
Currency trading always happens in pairs, in the sense that when you buy a particular currency you are actually selling another currency. For example, you sell US Dollars and buy Australian Dollars. Thus, a currency pair is the relationship between two currencies. In this context, it is advisable to know some basic terms and terminologies associated with forex trading.
- Base currency- the first currency in a pair
- Quote currency – second currency in the pair.
- Major Currency pairs – Pairs that contain US dollar as the base currency. These are the most frequently traded pairs and are the most liquid.
- Crosses–currency pairs that don’t contain the USD are called crosses. The three major crosses contain the EUR, JPY,and
- Exotic currency pairs – these are pairs where one currency is a major currency like the USD, JPY, GBP and the other currency belongs to developing economies like Brazil, Mexico etc.
Advantages of forex automated systems
It really pays to have a robot conduct a trade on your behalf; it is tedious to watch the monitors all day long and then place your trades but with an automated system with very little input from the trader one can hope to make profits. It is ideal for those interested in the forex trade but has no knowledge of the market and its trends.