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:
 CBC.ca | Forex Trading Prepares for US Retail Sales Data Forexyard (blog) Two major news releases are expected from the US today, the Retail Sales and Prelim UoM Consumer Sentiment. As with other recent US data, investors are ... Core Retail: Better Than Before? |
Recession-proof Trade FOREX System Creates WavesA novel method for FOREX ... BigNews.biz (press release) A novel method for FOREX trading has been generating a lot of talk lately for being the only method so far that takes the recession head-on and still helps ... Forex Trading and its Business Risks MF Global CEO Sees Trouble With CFTC Retail Forex Proposal |
Friday Currency Wrap-Up: The US Economy Is Still Trending Higher 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 ... |
 BigNews.biz (press release) | Automated Forex Trading is Taking Over the Market BigNews.biz (press release) Automated Forex trading is using software, generally called a robot, to handle your Forex transactions. You can choose to leave it entirely up to the ... Getting Help with Automated Forex Trading |
Forex Trading in 2010: Like the Equities Market in 2003? Seeking Alpha (blog) The first half of 2003, around the time the second Gulf War was about to begin, was probably one of the worst times for short-term trading (I heard 1994 was ... |
US dollar mildly lower as markets eye retail data Channel News Asia "A stronger retail sales report would add to the upside momentum in the dollar," said Kathy Lien, director of currency research at Global Forex Trading. ... |
Sterling up in Forex trading Knowledge to Action Sterling has climbed in value during Forex trading today (March 12th) after a new opinion poll eased fears that the forthcoming general election will create ... |
The Trend Trader For Forex Trading on Thursday, March 11, 2010 Inside Futures The Trend Trader helps to identify the current trend status of your favorite forex markets. It not only helps us to stay ... |
Forex Trading: Maintaining Your Discipline DailyForex Instead, you must accept that the necessary levels of Forex discipline required for successful Forex trading is difficult to maintain whatever method you ... Forex Trading Signals- The Choice Is Yours |
Eur/Usd: Narrow Price Range Continues Forex Factory ... to move to the next support or resistance level. The key thing is when will this happen? Timing in Forex Trading is important so you might... Full Story. |
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