Welcome to Online Trading Guide
Fx Trading Online Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
SO YOU THINK YOU CAN DO ON ONLINE FUTURES TRADING?
from:
Do you have what it takes to survive online futures trading?
Most investors would agree that that the futures market is a key economic center. A hub for intense competition among buyers and sellers and also a means to stabilize prices. The futures market is particularly precarious and intricate by nature. If that does not scare you, then you have the heart for online futures trading
But first things first, it is very important for you to know that when trading futures online or not, you never actually buy or sell anything physical; you are merely entering into an agreement to do so at a future date.
While you will perform the role of either buyer or seller or both, in trading futures, you are just a speculator, expecting to profit from increasing or decreasing prices.
You do not intend to make or take the actual delivery of the goods you are trading, your goal is to buy at a minimum and sell at the highest possible price or vice versa, therefore making your purchase earn you a profit. Prior to the expiry of your contract you will need to sell your contractual obligation to take or make delivery.
A futures contract therefore, is a type of investment instrument, in which two investors agree to negotiate on a set of financial instruments or physical commodities for delivery at some future date, usually three months, at a set price.
If you invest on a futures contract, you are agreeing to buy something that is not physically there yet at a fixed price. But participating in online futures trading does not necessarily mean that a buyer or a seller will be accountable for receiving or delivering huge inventories of physical goods.
Participants in the futures market primarily enter into futures contracts to minimize risk or speculate rather than to exchange physical goods with a goal of earning a profit.
As market prices are highly volatile and susceptible to economic movement, the futures market is a game of both chance and wit, therefore, definitely not for the risk averse.
Basically, futures exchanges offer two venues for trading: the conventional floor-trading venue and electronic or online trading.
Note that regardless of venue, trading is essentially the same in either format: Customers submit orders to be carried out by other traders who take equal but opposite positions, trading at costs which other customers buy or purchasing at prices which other customers sell. This matching of buyers and sellers occur in both floor and online trading.
The main difference is that in floor trading, orders are relayed to brokers in a trading pit, via phone calls from customers or through computers. Customer bids and offers are presented by brokers to other brokers standing in the pit, and matches are made.
Results of the trade are relayed to customers, then sent to clearing house and brokerages, and prices are spread instantly throughout the world. The order is time-stamped at the opening and closing of the trade.
For online trading, customers send buy or sell orders directly from their computers to an electronic marketplace offered by the exchange. Brokers are no longer needed to submit and execute orders for the customers as brokerage approval to trade as well as notice of activity to brokerages are instantly carried out by the computer. Notice the absence of the brokers in online futures trading?
The exchange online system notes all trading activity, and pinpoints matches of bids and offers. Trade information is then sent to the brokerage and clearing house, therefore prices are faster relayed to the public.
Fx Trading Online News
Quantum FX Pro
Category: Events & Auditions User : Guru1 Date : Thursday, 29/07/10 - 15:25PM Description : Quantum FX Pro Powerful forex trading strategies revealed. Step by step guide on how to trade forex online. QuantumFX Pro by Mr. Kishore M is the top forex trading course available! http://www.guruagent.com/quantum-fx-pro.html , http://www.docstoc.com/docs ...
Read more...Exciting times at Sharewatch
In 2001 Sharewatch launched its Telephone and Online Share Trading Services to its own Irish market. Sharewatch Ltd, unattached to banks or financial institutions, was the first Irish Company to offer a low cost online share trading service and to date has continued to offer better value services.
Read more...e-FX Awards 2010 - the List of Winners
The e-FX Awards 2010 (hosted by FX Week) took place in New York on July 13, 2010. We are delighted to announce this years winners:
Read more...AirAsia eliminates the FX guesswork
AirAsias new foreign exchange solution cuts out the uncertainty when dealing in multiple currencies.
Read more...Deutsche's Loh Boon Chye gets top CIB job in the region
The head of global markets for Asia-Pacific also takes a seat on a new 15-member CIB executive committee that aims for greater cohesion across the bank's key businesses.
Read more...