Introduction To Forex Trading

An Introduction to Forex Trading

I'm sure you've already heard of Forex trading. It is certainly one of the hottest topics around these days. But what exactly is it, and how can the average person make good money in Forex?

Forex, also called "FX", is short for foreign exchange. The foreign exchange doesn't get the big press like stocks, options, and commodities. But the foreign exchange is the biggest market in the world and it offers investors an incredible opportunity for profit.

When you trade on the foreign exchange, you don't trade in stocks or bonds, but in currency.

Simply put, Forex trading is just the buying of one currency and the selling of another. As exchange rates go up and down, you either make or lose money.

With Forex, you're not investing in a single company or even a group of companies. You're investing in the economy of nation. You are betting that the overall economic health of one nation will improve in relation to that of a second nation.

For example, let's say you are analyzing the US Dollar and the Japanese Yen. Your research seems to indicate that the US dollar is undervalued and is due for a rise in price, and at the same time you expect the Japanese Yen to lose value.

In this case you would execute a trade to buy US dollars and sell Japanese yen.

If you are correct and the exchange rate rises, you make a profit!

So its a cinch, right?

Well no, not really.

Currency prices can be incredibly difficult to forecast because there are so many factors that can contribute to a change in exchange rates. And you must remember that in currency trading you always trade in pairs. You buy one currency and sell another. So you can't just look at one nation's economy; you must look at two.

Of course, you do not have to limit yourself to only one pair of currencies. There are dozens of different currencies to choose from. But if you are just starting out, I suggest sticking to the seven major currencies:

USD - US Dollar

EUR - the Euro

GBP - British Pound

JPY - Japanese Yen

CHF - Swiss Franc

AUD - Australian Dollar

CAD - Canadian Dollar

Most small investors concentrate their trading on just these seven currencies.

 

Forex News Updates:

Forex Trading: GBPUSD Tumbles. Talk Of A UK Clearer Selling Daily Markets The GBPUSD took a tumble lower. Market chatter is a UK clearer was selling (this is not confirmed). The price fell below the trendline support outlined in the morning commentary. The price is now below the 38.2% of the weeks trading range at the ... and more »

Forex Trading: EURUSD Makes New Highs… Daily Markets (blog) The Friday afternoon squeeze is on as hopes for Greek solution and weaker GDP lead to the dollars decline. In Greece the comment from a spokesperson is there is one step left for an agreement. At the same time the word is a 2nd bailout may be coming ... and more »

US: A soft GDP report, QE3 more likely Forexrazor Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. This website is neither a solicitation nor an offer to Buy or Sell currencies, futures, ... and more »

Forex Trading: EURUSD Moves Toward 38.2% Retracement. Topside Trendline Also ... Daily Markets The EURUSD is approaching some upside targets for the pair. The first is the underside of the trendline on the hourly chart above. That level comes in at the 1.3222 level currently. The next would be the 38.2% of the move down from the October 27th ...

Forex Trading: USDCAD Shoots Higher Daily Markets The Dec job gain was revised up to 21700 from 17500 but the USDCAD has moved sharply higher over the last 20 or so minutes of trading. The surge higher has nearly fully reversed the decline today and seems to have surprised a short market.

Forex Trading: AUDUSD Reverses And Now Down On The Day Daily Markets The AUDUSD reversed course with a reversal of the stock market in pre opening trading. The price fell below the close from yesterday at the 1.0630 level but has found support against the 38.2% of the weeks trading range. Traders will likely use these ...

PR Web (press release)

Secured Online Forex Trading – The Latest Online Security Information PR Web (press release) In this day and age, online forex trading secure platform to keep track of their portfolio's activity and trade comfortably wherever they are. Ensuring an only authorized access, InvestTechFX uses multiple layers of top class firewall protection ... and more »

FOREX.com Launches New German Service in Support of Long-Term European ... MarketWatch (press release) A pioneer in online forex trading, GAIN Capital operates FOREX.com®, one of the largest and best-known brands in the retail forex industry. GAIN's other businesses include GAIN GTX, a fully independent FX ECN for hedge funds and institutions, ... and more »

FOREX.com Launches New German Service in Support of Long-Term European ... PR Newswire (press release) A pioneer in online forex trading, GAIN Capital operates FOREX.com®, one of the largest and best-known brands in the retail forex industry. GAIN's other businesses include GAIN GTX, a fully independent FX ECN for hedge funds and institutions, ... and more »

Forex Trading: USDJPY Breaks Below The 100 Hour MA At 77.41. The 77.13/20 Area ... Daily Markets (blog) The USDJPY has been unwinding the rally that took the price above the 100 day MA (blue line below) and right up to the 200 day MA just yesterday (green line in the chart below). The price has just fallen below the 50% retracement of the move higher and ... and more »