FX Market basics
“Welcome to Forex market basics. This intro to the currency markets will guide you through the fundamentals of the FX market.
You’ve arrived here because you are interested in learning about the Forex market, and how you can trade currencies for profit. Before we get started, it’s important to understand the basics of Forex.
Forex trading is inherently risky. Experts recommend that you follow sound advice when trading currency pairs. Before you adopt a strategy and trade for real, practice multiple trading strategies in a demo mode first.
You can turn a handsome profit trading Forex, but you can also lose money. This is why it’s important to set a budget before you start trading.
Forex is traded in pairs. Look at the USD/JPY pair as a case in point. If you go long on the pair, it means you’re optimistic about the USD. If you go short on the pair, it means you’re pessimistic about the USD.
Thanks to the Internet, anyone, anywhere can trade Forex online. You can easily generate profits from currency movements relative to one another. But remember, you will need to understand the impact of macroeconomic variables on currencies.
The value of the Forex market is estimated at approximately $5 trillion per day. That dwarfs the trading activity on Wall Street by a long margin. With so many buyers and sellers, you can expect low transactions prices.
You can trade Forex 24/7, and you can use various tools to increase your profits. Remember, most Forex brokers don’t charge commissions – you are simply paying the spread. Instead of trading stocks, you can pick from major, minor, or exotic currency pairs.
Forex trading is even possible with a small budget. Your risk profile will determine how much you are prepared to invest in any particular trade.
That’s a wrap for FX market basics!”