Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Chinese Tech Stocks CCP Paranoia and Best AI Tech Stocks ETF - 26th Oct 21
Food Prices & Farm Inputs Getting Hard to Stomach - 26th Oct 21
Has Zillow’s Collapse Signaled A Warning For The Capital Markets? - 26th Oct 21
Dave Antrobus Welcomes Caribou to Award-Winning Group Inc & Co - 26th Oct 21
Stock Market New Intermediate uptrend - 26th Oct 21
Investing in Crypto Currencies With Both Eyes WIDE OPEN! - 25th Oct 21
Is Bitcoin a Better Inflation Hedge Than Gold? - 25th Oct 21
S&P 500 Stirs the Gold Pot - 25th Oct 21
Stock Market Against Bond Market Odds - 25th Oct 21
Inflation Consequences for the Stock Market, FED Balance Sheet - 24th Oct 21
To Be or Not to Be: How the Evergrande Crisis Can Affect Gold Price - 24th Oct 21
During a Market Mania, "no prudent professional is perceived to add value" - 24th Oct 21
Stock Market S&P500 Rallies Above $4400 – May Attempt To Advance To $4750~$4800 - 24th Oct 21
Inflation and the Crazy Crypto Markets - 23rd Oct 21
Easy PC Upgrades with Motherboard Combos - Overclockers UK Unboxing - MB, Memory and Ryzen 5600x CPU - 23rd Oct 21
Gold Mining Stocks Q3 2021 - 23rd Oct 21
Gold calmly continues cobbling its Handle, Miners lay in wait - 23rd Oct 21
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

UK and Forex Markets – Trading in GBP

Currencies / British Pound Oct 10, 2016 - 08:49 AM GMT

By: ....

Currencies

Forex (short for foreign exchange) trading is a speculative option that has increased in attractiveness over the past few years. Forex brokers offer trading that comes free of commission, and with the chance of making massive gains. It's easy to get going with trading, and forex markets do not have the same negative reputation as some other markets, such as binary options.


If you are in the UK, and you want to start trading in forex, you're probably going to want to start trading in a currency that you're familiar with – namely the 'good old' Great British Pound. The question you'll want to know the answer to is how safe is it to trade in GBP, and what gains (or losses) are likely? - Investoo has some great free training courses.

First of all it has to be underlined that forex trading in GBP is the same as trading in any other currency – it comes with risk. It's a massive market full of experienced traders – traders whom work for the largest banks and financial institutions in the world. It is not a market for the unprepared. If you are going to be trading in foreign exchanges then you need to do your homework before you even think about investing a single penny of your own (or anybody else's money).

You also need to understand that with forex trading there is actually no 'exchange' (like the stock exchange) – trades takes place between brokers, fund managers and banks. Ten financial-based firms are responsible for three quarters of all trades that are made.

Everything you wanted to know about the Great Britain Pound
The pound (also called sterling, as when created it was made from sterling silver and weighed one troy pound) is the fourth most-traded currency in the world, after the US dollar, the Euro and the Japanese Yen. It is also the third most popular reserve currency (a currency held by banks and other financial institutions in order to pay off international debut obligations or to influence exchange rates).

The pound used to be the most dominant currency in the world, thanks mainly to the success of the British Empire (as recently as 1913 a quarter of the world's population lived under the rule of the British government). The dire economic consequences of the second world war, the independence recognised by Great Britain of its former territories and the success of the USA post-WWII all saw a fall in GBP's dominance.

Despite the creation of the Euro in 1999, the UK was allowed to remain a member of the European Union and retain the pound as its currency.

The pound and the UK economy
The UK has a highly globalised economy, and London is regarded as the world's second-most influential money market after New York City. In 2016, the World Economic Forum announced that it considered the UK economy to be the seventh most-competitive in the world.

The main concern for the UK economy is the percentage of debt that contributes to the country's GDP. In the late 1990s this peaked at fifty percent, but the UK recovered to show consistent improvements until the banking crisis of 2008. The UK's national debt now stands at ninety percent after falling as low as thirty-six percent as recently as 2002.

The main considerations of trading in sterling
Despite the UK's tumble as a globally-competitive economy (it was ranked as low as tenth in 2015), GBP still holds significance thanks to its history and it being the third most widely-held reserve currency. The standing of London as a major global financial centre is also of importance in this regard.

The UK has always been a prudent and somewhat unexciting economy. Economists believe that the UK will continue to adopt policies that are designed to create slow and steady growth. Whichever political party is in power, the decisions made tend to be low-risk. This meant that after the 2008 financial crisis the UK did not suffer as much as some other European countries, such as Greece, Italy, Portugal and Ireland.

Despite recent falls in the value of sterling (mainly thanks to the uncertainty caused by the unexpected 'out' Brexit vote) it remains one of the strongest currencies in the world, and one of the few major currencies that is worth more than the US dollar.

Trading in GBP – what you need to know
It is notoriously difficult to predict currency rates. Most predictive models only work for brief periods of time. Models that are based on economics are infrequently useful for short-term trades. Economic conditions do though suit long-term factors.

The UK is a small country (population 64 million, one fifth of the population of the US) that has a global economy that trades with all major and most minor nations. It also has a strong history of economic leadership across the globe. Its economy is based on a decent balance of services and manufacturing, and it adopts policies that are geared towards stability and steady growth. It's a resolute alternative to the dollar, and GBP will remain an important global currency for the foreseeable future.

GBP/USD has long been considered one of the top currency pairs, and GBP/USD trades count for over ten percent of all trades made on foreign currencies exchanges. This exchange is characterised by price instability and high levels of volatility. This makes it ideal for short-term traders who prefer to trade aggressively. Trading GBP/JPY is also worth considering, but the most predictable currency pair involving the GBP remains GBP/USD.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in