Currency Trading
Currency trading, also know as "forex trading," has experienced phenomenal growth in the late nineties as more and more day traders have discovered the advantages that day trading currencies has over trading stocks.
Currency trading involves the exchange of one currency for another; for example, US Dollars for Euros. Currencies trade in pairs and a trader buys the currency that he thinks will appreciate in value relative to the other.
When looking at a currency trading software platform, the similarities with a stock trading system are striking. Consequently, a stock day trader can easily learn how to use a platform to day trade currencies. Since there are only a few major currencies to trade (versus tens of thousands of stocks), it is a lot easier for a beginning trader to focus on a few pairs. The ability to trade currencies 24-hours a day (from Sunday afternoon to Friday afternoon), flexible leverage*, and difficulty to manipulate the market, are just some of the many advantages that are rapidly making currencies one of the day trading vehicles of choice for the 21st century.
*Please note that high leverage magnifies both gains and losses.
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