About Currency Trading

As we know, there is only one way to make money trading; buy lower and sell higher (or sell higher and buy back lower for short sales). To buy lower and sell higher prices must trend higher from where you bought (or lower from where you sold). If prices never trended there would never be an opportunity to make a profit! Furthermore, without up and down price movements institutional traders (hedgers) would have no need to insure themselves from price changes and trading volume would disappear What this means is that price trends are the essence of all-profitable trading.

The realization that trends are the essence of profitable trading makes the idea of trading currencies very exciting, because currencies are the worlds best trending markets! Countless studies of trend following systems prove that currency trends are the most consistent and often the most profitable. Regardless of the type of trend following system used; long term, intermediate term or short term, currencies invariably outperform all other markets including stocks, bonds and other commodities. It should come as no surprise that some of the worlds' most successful traders are currency traders.

One-reason currencies trend better than every other market is because of their macro-economic nature. Unlike many commodities whose supply and demand fundamentals can literally change with the weather, currency fundamentals are often less random and more predictable.

In summary, Forex Trading is not conducted on a regulated exchange and as a result there are additional risks involved, and this type of trading may not be suitable for all individuals, but currencies remain one of the best all around markets. Currencies represent the worlds' largest market place, and have the most powerful and persistent price trends.