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Today traders take advantage of the fluctuation in value
among currencies through the forex or foreign currency
markets. It is quite common to see a trader who suspects
that the value of the Euro will go up against the yen or the
dollar and follow the old axiom of “buy low and sell high.”
On of the ways this is done is through margin trading. With
margin trading a trader doesn’t have to have all the money
in an account that is being traded. If a trader has 10,000
and works with a one percent margin, he is able to trade
$100,000 in currency. This adds great leverage to the trade
and makes forex trading very attractive to many who are
looking for a large and quick return on their investments.
Forex traders are also attracted to the low costs associated
with trading since most trades are without commission.
The fact that there is a 24 hour trading cycle is also
12 attractive to many. Traders have opportunities for large
profit, but they also have risk inherent. An aggressive
trader may experience profit and loss swings of up to 30%
in a day. This can be 30% to the good, or to the bad, so
forex trading requires education and courage as well as
capital. However there are no daily limits and no
restrictions on trading hours other than the weekend when
markets are closed. For this reason there are always
opportunities. Money will always be made.