Volatility and the FX Market

November 20, 2008

The currency trading story changes regularlyOne of the defining features of the FX market is volatility. When currency trading, it is important to remember that the story can change rapidly. While this is true of all financial markets, the liquidity of the FX market makes it even more pronounced.

Keep in mind that a currency that may be gaining in the morning may be losing by the afternoon. And because the FX market is a 24 hour market, things can change again by evening and again by nighttime and then again by early morning.

Before engaging in forex trading, it is important to make sure that you understand how the market works, and that you can handle the risk involved.