When Can You Jump Into FOREX Trading?

If you've been studying the Foreign Currency Exchange Markets with the expectation that you wanted to jump into this pool, when's the right time to dive? It really depends on what's happening in the marketplace right now. Most traders are not aware of the millions of other traders in the market and how much influence they can collectively have on the stability of the FOREX.

The FOREX is dominated primarily by the commercial traders. They have great stockpiles of cash and are always looking to make small moves to improve their positions. Commercial traders aren't in the business to make large sums of money on a single trade, however, they're there to keep all currencies, and therefore all economies, steady. Commercial traders get paid well to keep currency variations in check to minimize the possibility of an economic collapse or a run on the bank.

The next largest group of traders in the FOREX is the Speculation Traders. Their goal is to make as much money as they can as quickly as they can to increase profits for their clients. The only way speculators make large amounts of money is when currency prices fluctuate quickly over a short period of time. So when some of them see a diverging trend in a currency pair, they start to trade, which makes the currency look like it's going to run, so even more traders jump in, and so on. The trend will be short and troublesome for some, but to be jumping into the market trading currency pairs that volatile is not a sound strategy.

So, to answer the original question, there never is a perfect time or a rotten time to enter the FOREX marketplace. Traders can keep markets steady, or they can make them move, even if it's only for a short while. When you decide to get into the pool, start at the shallow end and wade in. Start with smaller investments and watch the market work those before diving head first into the water and possibly drowning when you're underwater. Be smart, work your strategy, don't lose your nerve. Have fun!

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