FX, or FOREX, stands for Foreign exchange, and it is the name of the market the used to trade the world's many currencies. The primary traders of Forex markets are all the major banks and corporations, which trade billions of dollars each day. Because the top three currencies that are most traded on the Forex are the US dollar, the Japanese yen and the Euro, the major trading centers for Forex are London, New York, and Tokyo. These pairs are always against the US dollar and the main crosses you will find when trading forex are the USD/EUR and the USD/GDP. Because of this, Forex investors are generally well informed about the market and understand the current situations in many countries of the world. Currency prices on the Forex are affected by the forces of supply and demand, which in turn are affected by economic conditions. This is especially true for developing countries where the fluctuations of the forex are much higher. The uses of technical analysis and fundamental strategies in forex are much the same as other markets: price is assumed to reflect all news, and the charts are the objects of analysis. The past trends in the Forex are also taken into consideration, but are not the only thing that is looked at when forecasting this type of market.

Both stocks and forex are considered as high risk/high returns business, but with Forex, stops are guaranteed to be filled, and your only risk is your initial margin deposit. In any market where a potential for profit exists, there exists also a risk of loss, so you need to learn to manage the risk before trading in the forex market. Although, almost every kind of investment involves some risks, the risk of loss can be substantial while trading off-exchange forex contracts. Because it is speculative in nature, you can lose all of your investment, so the golden rule must be: don't risk what you can't afford to lose. But, thankfully, there are some safeguards to help minimize against these risks. The ability to customize the size of the trade will allow you to have a better risk management of your money, and the most common risk management tools in forex online trading are: the limit order and the stop loss order. So, whenever you are taking a risk on the FOREX market, so you have to know your limits and what you can afford to lose.
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