Finance

The Stock Market is Tumbling. What Next?

forexPeople love to play the stock market. I always found it intriguing that we use the word ‘play' when referring to investments that can leave us high and dry in a matter of minutes. The truth is, however, that we actually do ‘play' the markets. Dropping our dollars into a stock in hopes of making a fortune is really like tossing our money into the air in hopes that it lands in the right square on the game board.

Indeed, investing in any fiduciary vehicle is taking a gamble. It hasn't stopped millions of people, though, from placing their bets on a ‘sure thing' only to find that during the next day's fall, they have lost all their money.

The act of buying and selling stock was introduced in the US on May 17, 1792 when twenty-four New York City stockbrokers and merchants gathered under a buttonwood tree outside 68 Wall Street, officially forming the New York Stock Exchange. Only 5 securities traded in New York City with the first listed company on the NYSE being the Bank of New York.

Since that time, we have witnessed many ups and downs in the stock market. And over the years, investors and traders have found a plethora of ways to part with their hard earned cash. Today, with the stock market moving all over the place like a roller coaster, and day traders seeing their profits plunging to rock bottom, investors and traders are looking beyond stocks to other financial instruments, such as Forex, to make their fortunes.

Forex is short for foreign exchange and forex markets are where different world currencies are traded. When you trade Forex, you are basically choosing a currency pair, for example dollars and yen, and betting that their price ratio will either go up or down. You don't have to know anything about the investment instrument and it doesn't matter if you understand how the whole thing works. The fact that world politics and global economies directly affect all currencies is of little interest to you. All you need to know is if you ‘bet' that the price will go up and it does, you win. If not, you lose. Very short and to the point.

It is precisely because you don't have to really understand anything about it that trading Forex has become so popular over the years. If you want to gamble, this is the place to be. There are dozens of online forex brokers who will be glad to register you as a member and provide you with all the tools for opening an account and placing a trade. Most online brokers offer 24/5 customer support and allow you to trade in a demo account for a while before sinking your money into the real thing. You can start trading with a minimum of funds and with an available leverage of 120 or 150%, it is almost impossible to hold yourself back.

To get a better handle on a forex broker and to assist the novice trader in selecting the best online broker there are companies such as DailyForex that issue Forex broker reviews and report on everything going on in Forex markets all over the world. Still, currency trading is a very risky business. No different than most investments, I'm sure. So trading currencies is the flavor of the month. But watch out. Can binary options be far behind?

An article published for Cina Coren, a contributing editor at DailyForex. She has spent many years as a Wall Street stock broker and writes freelance for several financial publications.

A post by cina (2 Posts)

cina is author at LeraBlog. The author's views are entirely his/her own and may not reflect the views and opinions of LeraBlog staff.

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