Free Guide to Trading Forex during Volatile Times

SYDNEY, May 23, 2012 /PRNewswire/ --

The recent falls in commodity currencies, including the Australian dollar, show how volatility in global markets could present trading opportunities for forex traders.

For example, the Aussie dollar (AUD) was trading as high as US$1.0470 (against the US dollar) at the end of April 2012. With the change of political leaders in France and the return of concerns in Greece's economic situation, commodity currencies have suffered quite substantial losses.

With forex trading, you can still trade and possibly make profit whether the market is going up or down. This is because with currency trading, you can either go long or short most of the currency pairs you'd like to trade.

Forex trading is the simultaneous selling and buying of one currency against another. Take for example the Australian dollar and US dollar cross.

When you go long the Australian dollar, you are simultaneously going short the US dollar. This is the true with all the other currency pairs including the majors such as the EUR/USD (Euro/US dollar), USD/JPY (US dollar/ Japanese Yen), USD/CHF (US dollar/ Swiss Franc and USD/CAD (US dollar/Canadian dollar).

When you trade with City Index Australia, you can trade all the major curries and crosses using the various trading platforms. You can either go long or short the currency of your choice and take advantage of trading opportunities such as what we're seeing in the global markets now.

With commodity currencies still trading lower due to volatile market conditions, some traders are taking advantage by going short their currency of choice.

On the other hand, the US dollar has seen some appreciation during the past week. And this has encouraged some traders to go long the US dollar in anticipation of further moves upward.

Whether you are bullish or bearish on a particular currency, you must take into consideration that trading forex carries a higher degree of risk and may not be suitable for all investors. While there are trading opportunities both ways (up and down market), you should put in place risk management strategies and use stop loss orders.

About City Index

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

City Index is a leading global provider of margined foreign exchange and CFD trading. As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. To learn more visit: http://www.cityindex.com.au/