An Introduction to Forex Currency Trading

Are you thinking of investing in the Forex Market? Here's a basic introduction to get you going.

The Forex Market, also referred to as FX or foreign exchange trading, is potentially the most lucrative market that you can trade in. The Forex market is huge, with a turnover of around $4 trillion dollars every day.

How it works is that one currency is exchanged for another in the hope of making a profit when the exchange rates changes. The exchange rates are constantly changing and can be affected by national events, market news and even the stock exchange.

Until recently FX trading was almost entirely in the hands of banks and institutions with large investment funds. With the rise of the internet in recent years ordinary people can now also access the market.

Currencies (each represented by 3 letters - e.g. US Dollar is USD) are traded in pairs. Every trade involves the buying of once currency pair and the selling of the other currency pair. The eight most popular currencies pairs are:

EUR /USD: Euro / US Dollar

GBP/USD: Pounds Sterling / US Dollar

USD/JPY: US Dollar / Japanese Yen

USD/CHF: US Dollar / Swiss Franc

USD/CAD: US Dollar / Canadian Dollar

AUD/USD: Australian Dollar/ US Dollar

NZD/USD: New Zealand Dollar/US Dollar

The benefits of trading on the Forex market are:

• You do not need a large amount of capital. You can do leveraged trading through a brokerage where you invest a small amount and can then trade with tens of thousands of dollars.
• The cost of trading is low as brokers do not charge a fee or commission, but instead earn their money on the spread (the difference between the buy and sell prices of a currency).
• The Forex market is very easily accessible as it is open 24 hours a day, 5 days a week and you can trade in your own time zone, whenever it is convenient for you.
• You are not limited to trading in your own country. You can trade any two currencies no matter where you live.

Please remember that as with any investment there is also the risk of losing money. You have to accept before you start that you will lose some trades. Therefore it is important that you never trade with money that you don't have. Only trade with money that you can afford to lose.

You can minimize the risk of losing your money by finding a profitable trading system with clear strategies and then to stick to the system and your decisions. Keep clear records of all trades and try to learn from your results. It might also be a good idea to invest in a forex robot, which will do trades for you according to its programmed system.

If you want to learn more about forex trading, please visit my site at: http://www.helpmetradefx.com. Articles are added almost on a daily basis. You can also check out my review on the new Forex Megadroid.