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:
 International Business Times | Forex Trading Currency Exchange Rates – Dollar Loses Against Euro and Yen Again Best Syndication (Best Syndication News) The dollar gained against the pound sterling and Swiss franc but lost against some other currencies (see forex tables below). ... Dollar defensive after trading lower on risk appetite Forex Trading: US Dollar Under Pressure Prior To Payrolls Report |
New CFTC Forex Trading Rules Call For 50:1 Leverage Forbes (blog) Thankfully, the CFTC responded to the pleas from the off-exchange retail forex trading industry saying the CFTC's proposed 10:1 leverage rule would put the ... CFTC Decision On Retail Forex Trading Effective As Of October 18, 2010 At OANDA, It's Business as Usual After CFTC Leverage Ruling Will Foreign Forex Brokers Get "Gambling" Classification |
CFTC Issues New Forex Trading Rules New York Times (blog) In its first implementation of the Dodd-Frank law, the Commodity Futures Trading Commission said Monday that it had published a new set of so-called final ... CFTC issues final rules on retail forex trading |
European shares cautiously higher ahead of NFP report 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 ... |
 Christian Science Monitor | Condolences to the currency professionals Christian Science Monitor A press release from TD Ameritrade touting their new Forex trading offering from August 24th? TD AMERITRADE Holding Corporation today announced that futures ... Forex Trading: Investing in Advanced Currency Markets |
 FXstreet.com The Forex Market | Forex Trading: Japanese Yen Approaching All-Time High Against US Dollar Daily Markets Good day ladies and gents. Well, it's been a pleasant couple of months or even years for the Japanese yen bulls. As you can see, the USDJPY has sunk for 4 ... Forex Daily News: Dollar Back on Track as GBP Slides Forex Daily News: USD Won't Go Down Without a Fight Forex Daily News: Risk Appetite Returns, USD Drops |
 Globe and Mail | Forex trading up 20% in 3 years One Financial Reuters reports the Bank for International Settlements found increased demand for Forex trading was driven by a number of factors, including the expansion ... Forex Trading Volume Officially Hits $4 Trillion Forex trading grows to $4 trillion a day Global crisis slows growth in forex trading |
Online Forex trading affected by Ozawa proposals? One Financial Those who engage in online Forex trading might become more risk averse if it was suspected measures to control the Japanese currency would impact upon its ... |
 Washington Post | Forex Trading: The Yen Is A Battleground Daily Markets The Euro jumped in the European session as risk appetite returned to the market. The Euro currently trades around 1.27. The tug of war between traders and ... Forex Trading – Currency Exchange Rates – Dollar Gains Against Yen And Euro Today Dollar slips as US economic recovery jitters persist Yen strength 'not so unprecedented' |
 Lucky Room | Forex Trading and Currency Exchange Rates – Dollar Loses Against Major ... Best Syndication (Best Syndication News) The dollar declined today against most major currencies as US stock market rallied (see forex charts below). ... September forex trading brings risk rally to Asia |
Forex Articles:
Forex Trading Vs The Stock Market
Fundamental Analysis Vs Technical Analysis
Understanding Margin And Leverage
