Futures Trading Forex
By Chad Sullivans
Currency Futures Trading is done on the basis of the futures of a pair if currencies based on a standardized Currency Futures contract. The commodity bought and sold is a pair of currencies. The amount expiry time and exchange rates are standardized.
Currency Futures Trading is done under a legally binding contract. It obligates trade in two particular currencies at the current exchange rate. The trader can either own the currency at the time the currency is written or may gamble on the premise that the exchange rate of the currency will be cheaper before the payment or the settlement date.
Carefully conceived methods are used in the trading of currency futures. Currency futures are traded in lots and a trader opens a margin account giving the right to trade in currency. The trader buys a quantity of the base currency and sells (short) an equivalent amount of the second quote currency (to pay) for the base currency.
All market fluctuations relate to futures and values of currency can greatly impact transactions. Currency Futures Trading is a valuable part of futures trading because traders can hedge and aid the buy- sell opportunities of most currencies. The trends in Currency Futures Trading forecast the moving averages in a futures market.
There are many marketing and trading advantages in currency futures trading. A well regulated currency market has low transaction costs. Currency Futures Trading ensures immediate liquidity. The possibility of short selling does not exist in a currency market. This makes the currency futures market, the market with the most liquidity. Currency Futures Trading benefits the trader both when the market rises and when the market falls. Investment in Currency Futures Trade can be done through mutual funds which are large units that take investments from small investors
and re-invest these funds in the currency futures trade and by individual investors through online and real time currency futures brokers.
All is not a bed of roses in Currency Futures Trading. The risks involved in a market with unlimited liquidity far outweigh the risks in other markets. Constant vigil on expiring contracts should be kept. Currency Futures frequently fluctuate and it is not possible to minutely regulate the market. A successful trader has to manage the buying and selling currency with a profit goal carefully because of the extreme sensitivity of the currency market and consequently the Currency Futures market. Currency Futures Trading is regulated by the United States Commodities Futures Trading Commission (USCFTC). The commission addresses the grievances of customers against the fraud and bogus acts of Currency Futures Trading Professionals inclusive of Mutual Funds. The trade is regulated and the ethics of professionals are regulated by the commission. The laws in the United States recognize the huge risks involved in currency trading and all currency futures professionals are expected to give disclaimers in any advertisement that they are not authorized to give advice and the investor is encouraged to independently evaluate any investment he or she decides to purchase. Currency Futures Trading is a case of trading with immense liquidity. Excessive liquidity can drown the trader However if a trader can carefully manage the buying selling and profit goals of the trade, the trader will easily start swimming in profits.
Leon Bressert has been involved in trading futures as a broker for more then 15 years. He owns www.lbtrading.com introducing broker. He offers free demo's to his online trading programsCommodity Futures Trading
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