Currency trading, or the “Forex” market, is the largest financial market in the world. The Forex market is thirty times larger than all of the US stock markets combined. Many people are unfamiliar with forex trading, but it’s actually quite simple and easy to understand once you learn the basics.
Learning the basics of forex trading doesn’t have to be difficult.
The purpose of this article is to introduce you to the forex market, equip you with the right knowledge, and give you the tools you’ll need to be a successful Forex trader.
At first, Forex can seem confusing and intimidating. But really what we are talking about is money, here and trading with the different global currencies.
The Forex market is a market in which currencies are bought and sold. The Forex market is different from the stock market because currencies are traded on it, while bonds or stocks are traded on the stock market.
These are the three most common terms you will come across in the forex market:
1. RATE – the current price of a currency.
2. SELL PRICE – The amount that traders could sell their coin for.
3. PURCHASE PRICE – The amount at which traders can purchase a given coin.
Another good thing about the forex market is its accessibility.
Today almost anyone in the world can trade Forex as the market is global. Even if you don’t live in the major commercial hubs, the cities of London, New York and Tokyo, you can trade Forex from anywhere in the world via the Internet.
Access to the online forex market is very easy to set up. Many broker websites offer a Forex trading platform to download when you create your account, allowing you to start trading almost immediately.
Once you start your trading career, you will soon learn the lingo of different currencies, such as Cable, Greenback, Aussie, Kiwi, Loonie, Figure, Yard, and Swissie. Before long, he will eventually pick up and learn all the insider terms and start to sound like a real tradesman!
Now that you have some basic knowledge, the next step is to get more information and education on how to trade the forex market.
A great way to learn to trade currencies is to enroll in a forex trading course. Most of the online courses are made up of multiple detailed tutorials on various strategies that will teach you how to be a successful trader.
Another way to easily learn to trade currencies is to buy and read books on forex trading.
You can buy physical books in bookstores or on Amazon, buy and download e-books on Forex trading from the Internet. Be sure to first look for authors who are highly respected and have good user reviews.
Possibly the best way to learn to trade currencies is to “paper trade” using a virtual or demo account with an online Forex broker.
Many brokerage firms allow you to open a practice account for free or require you to deposit money into your trading account.
Practice accounts work exactly like a real account does, with a virtual dollar balance that you can “trade” and access live Forex market prices, charts and news. A practice account will allow you to make practice trades and will assume or calculate what your profit or loss would be on each trade, had it been a real trade.
Once you learn how to trade with your practice account and make consistent profits, you can add funds to your account and start learning how to trade forex with real money.