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 Volume Drops for First Time Since 2009 Wall Street Journal By STEPHEN L. BERNARD NEW YORK—Global foreign-exchange trading volume dropped for the first time since the financial crisis, according to data released Monday by four major central banks. Average daily trading volume in October totaled $3.470 trillion ... |
Forex Trading: Walk Before You Run Business Insider If you are new to forex trading, taking things slowly and gradually will help you not only survive, but will also increase your chances of long term success. Taking this slowly applies to the time and money spent in trading and also your education as a ... |
How Traders Boost Forex Trading Vocabulary with Vantage FX UK MarketWatch (press release) LONDON, February 6, 2012 /PRNewswire via COMTEX/ -- Vantage FX UK is helping traders to tell their adjustable pegs from their leading indicators with a comprehensive Forex trading glossary hosted on its website, http://www.vantagefx.co.uk/ . |
Forex: USD/CHF down ahead of Bernanke speech 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, ... |
Forex Trading: EURUSD Moves Higher On Greek Statement (Again) Daily Markets (blog) The market is clearly trading with short term intentions in place. Markets are sloppy. The market moved quickly to the upside on yet another comment about a Greek bailout. Because of the headline effect it seems that the real movers in the EURUSD ... |
 Best Syndication | Forex Trading and Currency Exchange Rates – USD/JPY rises as EUR/USD drops Best Syndication (Best Syndication News) The dollar is trending higher early Monday as stock markets in Europe open lower (see forex tables below). Last week's lower-than-expected US unemployment rate failed to provide enough optimism to bolster stock prices today. Forex - Asia Open - Overnight Highlights |
Fastrack to Forex Profits Review - Is it Scam? The Shocking Truth CubsNet.com Fastrack to Forex Profits is ground-breaking automated Forex Trading EA. Easy to install, it comes with a detailed instruction guide and performance manual. Within minutes of installation, this unique robot automates trading profits to die for you. |
Forex Trading: USDJPY Finds Sellers Against Retracement Level Daily Markets (blog) The USDJPY tested the 38.2% of the move down from the January 24th high to the low reached on February 1st. That level comes in at the 76.879 level. The high today reached 76.85 and has backed off. The next support level comes in at the trendline at ... |
eToro Blog Expands Social Trading Coverage with “Social Research” and “Market ... PR.com (press release) Limassol, Cyprus, February 07, 2012 --(PR.com)-- Social trading is a game changer in the forex trading industry from many perspectives. And it's not just the traders who are going through an adjustment period as they transition to this clearly more ... |
 Best Syndication | Forex Trading and Commodities – Gold and Silver Prices Advance while USD was ... Best Syndication (Best Syndication News) Gold prices jumped again today as traders took advantage of the long-term policy signals from the Federal Reserve (see forex and futures charts below). Although inflation could be curtailed by low rates, investors balked at the ... |
Forex Articles:
Forex Trading Vs The Stock Market
Fundamental Analysis Vs Technical Analysis
Understanding Margin And Leverage
Avoiding Failure In The Forex Market
