An Introduction To Forex Trading, And What You Need To Know
- Author Kenny Mann
- Published April 19, 2012
- Word count 492
The word 'Forex' is a contraction of 'Foreign Exchange', and is interchangeable with 'Foreign Exchange Market' and 'Currency Market'. At the simplest level Forex trading is about buying one form of currency, and selling it in exchange for a different currency, making a profit as you do so.
For example, if you purchase a sum of money in one currency, and then a few weeks later the exchange rate fluctuations mean that the value of that currency has grown relative to a different currency, then you might sell that sum in exchange for the other currency, effectively increasing the value of the sum you started out with.
Many people assume that to have any success with Forex trading you need a real understanding of how foreign markets work, of trading in currencies and of carrying out detailed financial research. In fact whilst this is all certainly true, there's something else which is perhaps more important, and that's simply an awareness of what is going on in the world.
If you read or watch the news, and have a reasonable idea of what's happening politically in terms of the relationships between various countries then you have a sound basis for moving into trading in foreign currencies.
For example, if you had purchased a stock of Euros a few weeks ago you may well have watched the news and seen Greece's financial problems escalating, and you may have guessed that this could have a detrimental effect on the value of the Euro in relation to the US dollar This would in turn have led you to convert your Euros to dollars. In fact Greece's problems did result in a significant fall in the value of the Euro, and those who moved into a different currency early on made either the most profit, or the lowest losses.
But obviously whilst a sound understanding of how the behaviour of the leaders of various countries may affect the exchange rates, it is also important to have a sound understanding of how the foreign currency trading system works. There's nothing like practical experience to help you achieve this, but practical experience can be expensive.
That's why it is often recommended that for anyone starting out in Forex Trading it is best to open a demo account and try your hand at virtual foreign currency trading. This allows you to gain practical experience without risking your own cash.
One thing which you will often hear is that Forex Traders have a gut instinct, and work very much on gut feeling. If you believe this then you're best off forgetting foreign markets and instead take up Blackjack or Roulette.
Forex trading requires careful analysis, sound plans and specific goals, and it requires note taking and a good deal of learning from mistakes and successes. This is why it is particularly important to try virtual Forex trading before 'spinning the wheel' and losing large sums of capital you can't afford to.
Visit Kenny’s website at tradersdaytrading.com to find out more about Forex Trading and learn some successful Forex Trading strategies to help you make money from the worlds largest financial market. Copyright: you may freely republish this article, provided the text, author credit, the active links and this copyright notice remain intactArticle source: http://articlebiz.com
There are no posted comments.
- How to find the best Forex signals?
- What type of regulation to expect in finance in 2020
- Top forex trading tips
- Third world countries where trading is most popular
- Forex Reviews 2020 by Top Forex Brokers Reviews
- 4 things to look for before investing in a stock
- What Forex Brokerages Should Look For in a Forex Trading Platform
- Does the license of a brokerage determine how worthwhile it is for traders?
- How to review a Forex Broker
- How to Use Oil Prices As A Signal in Currency Exchange
- How An Investor Can Use A Financial App To Select The Best Stocks?
- Should We Trade With Brokers With Lowest Spreads?
- 5 Lowest Spread Forex Brokers Review
- The Strategies from the Genus’ of Investing: Investing style is a mater of finding your personality type and risk tolerance
- Market Numbers Through 2017... Not Quite as Impressive as You Think
- Investing In Gold Smart Strategy
- Long Term Investing
- Variation Of Metatrader Platforms
- Determinant Of Exchange Rate
- Gilead Sciences Inc. (GILD)
- Investing in Driverless Vehicle Technology
- Gold Notes Investing
- Stock Market Today
- How To Tell If A Penny Stock Is Legit
- Approach Experts to Garner Assistance with Forex Transaction Matters
- Forex market participant
- Use Stop Losses To Keep Losses Small
- Cyprus Investment Firms: FOREX
- Paul Chehade - Helpful Stock Market Tips From The Pros
- Paul Chehade - Check Out These Great Stock Market Tips