Currency trading success can be achieved by anyone, as everything about trading currencies can be specifically learned, by any trader wishing to place it in the time and effort to do so.

Trading currencies successfully is a combination of two factors:

Firstly, you need a successful trading method for long term currency trading success to predict market direction and these systems fall into two categories:

1. Fundamental analysis

A currency trader who makes trades based upon fundamental analysis, will look at the supply and demand situation relevant to the particular currency studied, and try and predict the impact of such factors as:

· The health of the economy

· Interest rates

· Balance of payments

· Employment

· Trade deficit

· Other factors

In today’s markets with the all-fundamental information available in seconds anywhere in the world, fundamental news is quickly reflected in the price.

Traders therefore, can have difficulty acting quickly enough to position themselves in the market in relation to breaking news.

In light of this, more traders looking for currency trading success are using a technical approach to the markets.

2. Technical analysis

Technical analysis is the study of a currency, based strictly on using only the price history of the currency.

Technical analysis uses no information about the currencies supply and demand situation – it simply focuses on price action.

The common belief is that the currency price reflects all the known information about the currency as it is immediately discounted in price action.

Technical analysis but does something more – it indirectly studies human psychology.

Since price patterns reflect shifts in human psychology, one can assume that certain patterns, cycles and trends, will repeat themselves again, as human nature has remained constant over time.

Technical analysis takes into account both the fundamentals and the market participants psychology and this gives us a simple equation:

All known fundamentals + human psychology = Price action

The fundamentalist studies the cause of market movement, while the technician studies the effect.

For currency trading success, you need to catch the longer-term trends that yield the huge profits. The technical trader does not care how and why these trends develop; all they want to do is make money from them when they occur.

Look at any currency price chart over time and you will see long-term trends and many of them last for years.

The secret of currency trading success is using technical analysis to spot them.

Long Term or Small Term Trading

For long term currency-trading success, is it better to be a long term trader, rather than a small-term trader.

While traders can, and do make money with small-term methods of trading, the fact is, currencies trend longer term and these are the trends that yield the largest profits.

The reason for this is obvious:

Currencies reflect the underlying health of the economy.

These cycles of expansion and contraction, tend to last for many months or even years and a long term position trader has huge profit potential, if they can lock into and hold these longer term trends.

The choice between long term, and small term trading is subjective, but generally the longer-term price trends tend to be simpler to predict, and offer better risk / reward, so a long-term approach is the one to focus on.

The Foreign Exchange market (Forex) is truly the largest exchange in the world. The amount of dollars traded on the Forex market on a daily basis is in the trillions. Most of this currency trading takes place between between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. But, individual traders are starting to get in the mix, using internet discount brokers such as Etrade to participate in the currency exchange market.
There is no central exchange or meeting place for the Forex. All trading is done over computer networks between traders in different parts of the world. Also, unlike the stock market, the foreign exchange market is open 24 hours per day, because it is a global market. A trader in Hong Kong may be exchanging currency with a trader in Australia while an American trader is sleeping.
There are several different markets within the Forex exchange system. First, there is the spot market. The spot market deals with trades that are based on the current values of currencies. One person trades a certain amount of currency with another trader in exchange for an equivalent amount of a different foreign currency. Spot trades take two days for settlement.
The other two types of foreign exchange markets are the forward and futures markets. In the forward market, the buyer and seller agree on an exchange rate and a transaction date is set for a specific time in the future, at which point the trade is executed regardless of what the rates are at that time. On the futures market, futures contracts are bought and sold based upon a standard contract size and maturity date. Futures trades take place on public commodities markets.
A currency quote is listed differently from a stock quote. Stocks are quoted in terms of price per share. Currency exchange prices are listed as either a direct quote or an indirect quote. A direct quote uses the domestic currency as the base and the foreign currency as the quote. An indirect quote works the exact opposite way.
So, if you were to view a quote in an American newspaper that said USD/JPY = 75, that would be a direct quote and would mean that $1 of U. S. currency is equal to 75 Japanese yen. If that same quote appeared in that same American newspaper and was listed as JPY/USD = 0. 013, that would be an example of an indirect quote.
As with stock prices, currency exchange prices have a bid and question spread. The current bid is the amount of foreign currency that someone is willing to spend in order to buy $1 U. S. base currency. The question is the amount of foreign currency that someone is demanding in order to be willing to sell $1 U. S. base currency.
The Forex markets are generally considered to be less volatile than then stock market because within the course of a trading day, it is highly unlikely for the value of a single currency to go all that much. With equities, it is not uncommon for a trader to buy a stock, and then a negative press release causes the stock to lose considerable value within a day or even a couple of hours. Sometimes, but, the Forex can be volatile. If there is a significant economic or political development with a certain country, the currency of that country can lose value quickly.
There is a higher degree of liquidity on the currency exchange then there is on the stock exchange because the currency exchange is open 24 hours per day and because the very nature of currency exchange is to bet on when certain currencies will go up or down; so, it is simple to sell your position in a certain currency even when the value of that money is going down. A plummeting stock is more hard to unload, but not impossible.
If you want to start currency tranding, try to set aside some money and open an account with an online broker. Start slowly, then as you get the hang of it, work your way up to larger trades and higher volume. But, do not gamble your nest egg on currency trading because inexperienced traders can lose everything they have rather quickly in spite of the relative safety of the Forex market.

Forex, the largest financial market of the world can fetch you money. And it is possible only when you are pretty sure about your success in trading and know how to counter the odds of currency trading in adverse circumstances. A successful trader of currency trading needs to be awakened and alert about his proceedings and decisions. A small endeavor is made below to find out a few essential traits tagged with a successful trader of currency market.
Well, confidence comes at first. And it derives from learning. If you are new to currency market, make no go until you are confident about the aptness of your trading agreement. Go for some tutorials instead. If possible question around; preferably the experts having years of expertise in currency trading. You can consider the courses and tutorials on currency trading which are usually designed by professionals. These courses are also available online. It means getting an expert for your currency trading is never a tedious task. No matter whether you are in pajamas or suits, a single click can do it all at the comfort of your own home.
A tutorial or course in currency trading will teach you the market basics, policies, trade secrets, how to opening and managing trade account, increasing profits and many more. These inputs and particulars will surely help you to get confident. Confidence is excellent but sometimes over confidence may lead you to loss. The mantra of successful forex trading says a trader should be rational not emotional. He should be confident but not above the heads.
Now how a trader could counter the odds of currency trading in adverse circumstances? Well, the answer lies in his experience. The more he trade in the currency market, more he will be able to gain the experience. On the course of getting the experience, he learns about the currencies, economies, trading in pairs, technical and fundamental analysis of currency trading and many more. All these contribute to his development as a perfect trader of currency market.
The forex market is volatile. Along with advantages, the market has certain calculated risks also. Being an awakened trader of currency market, you should have a nose for news regarding everything latest in currency trading. You should able to calculate the risks and counter them with a confident stroke of trading.

Currency trading and the access to the forex capital markets, because of capital requirements and the technology involved, was in the past open only to hedge funds managers, large commodity trading advisors, institutional investors, and banks. It is opinion of who writes that forex markets are not random and the efficient market hypotheses and theories sustained by so many economists are flawed (Warren Buffet, regarding the Efficient Market Hypothesis, once said “I’d be a bum on the street with a tin cup if the markets were always efficient”); for this very reason it is possible to exploit the inefficiencies of the forex capital markets and devise profitable currency trading strategies.

In recent years the development of the web has made possible for many brokerage firms to offer currency trading to small retail traders: the phenomenon has started in the mid-90s with stock market day traders and has rapidly evolved and spread to currency trading. The forex capital markets are highly volatile: it is estimated that more than 80% of currency trading volume is speculative in nature and, as a result, the forex market has frequent corrections, is very unpredictable but can also be very profitable.

But, for long term forecast trends in currency trading, fundamental analysis, analyzing and focusing on the economic, social and political forces that drive supply and demand, can be an invaluable instrument; indeed, the fundamental analysis focuses on (sometimes very complicated) theoretical models of currency exchange rate that are determined and based upon major economic factors and their probability to affect currency trading and the forex capital markets. Fundamental analysis in currency trading is for this reason vital and this is even truer as currencies markets, more than other markets tend to develop strong trends.

Nevertheless, most forex traders do not trade positions over long periods, but tend to trade the forex capital market opening and closing positions one (or more) times per day — thus leading, in some cases, to overtrading. This should be no surprise: currency trading and the forex capital markets are well suited to price-based techniques, that is, technical and quantitative analysis. Technical analysis is the prediction of forex capital market movements from the data and information obtained from the past, and it uses different types of charts. But, an approach purely based on technical/quantitative analysis could be too restrictive and not lead to maximum profits: eventually, the most successful currency trading methods are the ones supported by both technical/quantitative and fundamental analysis. In fact, although testing and research in the forex capital markets requires a rigorous approach, there is an element that is a small bit of art: do not believe everything you see but question yourself why a particular system works and try to verify if the roots of it can be traced back in the behavior of the masses. The speed at which currency rates adjust to news is very high, even shorter than 15 o 30 minutes, and this is linked to the reaction (sometimes panicked and irrational) of people to particular news linked to exchange rates, or interest rates, or any other element affecting directly or indirectly the forex marked and currency trading.

In conclusion, forex capital markets, being still a relatively young and mostly underdeveloped compared to other segments of the financial markets, and given their intrinsic volatility, represents a remarkable opportunity to the educated currency trader. Elements that will help you to succeed are incessant practice, thorough knowledge of the history, science and art of currency trading, ability to deal with trade failures and the perseverance to be a forex trader with discipline: the only people who will not win at currency trading will be the ones who quit.

Exchange of a nation’s currency for that of another is Foreign Exchange (FOREX). The foreign exchange market is a largest non-stop financial market in the world where currencies of different nations are traded. This Forex market is larger than three times the aggregate amount of the US Equity and Treasury markets combined. This is not the traditional market as there is no physical location or central trading location. It is operated on a global network of banks, corporations and individuals trading one currency for another. Foreign exchange market conditions can change at any time in response to real-time events.

The purpose of investing in Forex trading is to earn profits from foreign currency movements. Forex trading is always done in currency pairs. Two currencies that make up an exchange rate are called currency pair. Investors who trade currency pairs need very quick buy and sell Forex signals. Without these Forex trading signals, it is hard to choose market conditions in terms of entry or exit in the market. These Forex signals and trade alerts will indicate you for going out or coming into the market. Many Forex companies, who have been involved in this kind of business, have developed forex sms signal services. Several Forex signal providers got a “free test” also that is really beneficial.

Initial investors don’t go for in details; they often rely upon one or two technical signals to choose when to buy and when to sell a currency pair. When they get a excellent understanding of Forex market, they start to use Forex signal software to choose when to pick up a forex entry point and forex exit point. It is not very hard to find a automatic Forex signal indicating when to buy and when to sell a currency. An investor should compare his investment to alternative options. It is wise to buy currency you expect an increase in value relative to the currency you are selling. In an open trade, a trader has bought or sold a particular currency pair and has not yet sold or bought back the equivalent amount to close the position

To gain high profits in a Forex trading, you should use a Multi-Target Exit Strategy. This strategy is based on providing the customers with multiple acquiring profit and stopping losses. This Forex trading strategy allows you to enter multiple Take Profit and Stop Loss levels. This Forex strategy also requires that the trader follows the trade in real time. A Forex trading strategy with a high profit percentage rewards you mentally also as it will boost you up for further trade and will make it enjoyable. A string of profits will increase your morale.

In Forex trading system, it’s not obligatory to buy some currency to sell it later. There are situations for buying and selling any currency without really having it. Usually Internet-brokers establish the minimum deposit such as $ 2000, for working in the FOREX market, and grant a leverage of 1:100. The major currencies traded in FOREX, are Euro (EUR), Japanese yen (JPY), British Pound (GBP), and Swiss Franc (CHF). All of them are traded against the US dollar (USD). A technical analysis is also made that presumes all the information about the market and further fluctuations in prices. They too consider factors, economic, political or psychological. For more information on forex trading logon to-: http://www. connection2forex. com

The Foreign Exchange market (Forex) is truly the largest exchange in the world. The amount of dollars traded on the Forex market on a daily basis is in the trillions. Most of this currency trading takes place between between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. But, individual traders are starting to get in the mix, using internet discount brokers such as Etrade to participate in the currency exchange market.
There is no central exchange or meeting place for the Forex. All trading is done over computer networks between traders in different parts of the world. Also, unlike the stock market, the foreign exchange market is open 24 hours per day, because it is a global market. A trader in Hong Kong may be exchanging currency with a trader in Australia while an American trader is sleeping.
There are several different markets within the Forex exchange system. First, there is the spot market. The spot market deals with trades that are based on the current values of currencies. One person trades a certain amount of currency with another trader in exchange for an equivalent amount of a different foreign currency. Spot trades take two days for settlement.
The other two types of foreign exchange markets are the forward and futures markets. In the forward market, the buyer and seller agree on an exchange rate and a transaction date is set for a specific time in the future, at which point the trade is executed regardless of what the rates are at that time. On the futures market, futures contracts are bought and sold based upon a standard contract size and maturity date. Futures trades take place on public commodities markets.
A currency quote is listed differently from a stock quote. Stocks are quoted in terms of price per share. Currency exchange prices are listed as either a direct quote or an indirect quote. A direct quote uses the domestic currency as the base and the foreign currency as the quote. An indirect quote works the exact opposite way.
So, if you were to view a quote in an American newspaper that said USD/JPY = 75, that would be a direct quote and would mean that $1 of U. S. currency is equal to 75 Japanese yen. If that same quote appeared in that same American newspaper and was listed as JPY/USD = 0. 013, that would be an example of an indirect quote.
As with stock prices, currency exchange prices have a bid and question spread. The current bid is the amount of foreign currency that someone is willing to spend in order to buy $1 U. S. base currency. The question is the amount of foreign currency that someone is demanding in order to be willing to sell $1 U. S. base currency.
The Forex markets are generally considered to be less volatile than then stock market because within the course of a trading day, it is highly unlikely for the value of a single currency to go all that much. With equities, it is not uncommon for a trader to buy a stock, and then a negative press release causes the stock to lose considerable value within a day or even a couple of hours. Sometimes, but, the Forex can be volatile. If there is a significant economic or political development with a certain country, the currency of that country can lose value quickly.
There is a higher degree of liquidity on the currency exchange then there is on the stock exchange because the currency exchange is open 24 hours per day and because the very nature of currency exchange is to bet on when certain currencies will go up or down; so, it is simple to sell your position in a certain currency even when the value of that money is going down. A plummeting stock is more hard to unload, but not impossible.
If you want to start currency tranding, try to set aside some money and open an account with an online broker. Start slowly, then as you get the hang of it, work your way up to larger trades and higher volume. But, do not gamble your nest egg on currency trading because inexperienced traders can lose everything they have rather quickly in spite of the relative safety of the Forex market.

Of course you want to be rich – who doesn’t? The thing is, with gas prices soaring right through the roof and daily expenses becoming too much to bear, only very few people can become rich. Well, if that’s what you reckon, you probably haven’t heard about foreign currency trading and how it is the answer to your prayers. By engaging in this kind of activity, you can become rich, richer than even in your wildest dreams. There are many scams that abound online, so we know your hesitation. But look around, search the web, and you’ll find that more and more people are attesting to the efficiency of the currency market as a money-making tool. Trust us, this is the one deal you don’t want to miss out on. So what is the currency market in the first place, you question? And how can you earn money in foreign currency trading? Stay with us and you’ll find out soon enough. The Foreign Exchange market is more commonly referred to as the Forex market, also known as the currency market, and exists whenever and wherever a particular currency is traded for another. It is the most liquid and the largest of all the available markets in the world today, covering trading between large banks, central bans, governments, currency speculators, multinational corporations, individual traders, and other financial markets and institutions. It operates by trading pairs of foreign currencies, all of which are pressed against the value of the US dollar. You buy one currency in the pair you have chosen and sell the other, depending on your estimate of the value of each. For example, in a EUR/USD, you buy the first and sell the second. You’d want to invest in the Forex market straight away, because the average daily trade in the global currency market and related markets amount to nearly US$4 trillion. You certainly want to take a piece of that foreign currency trading pie. The first thing you have to do is to open a Forex account. Since you may want to practice caution on your first try, a mini Forex account, in which lot prizes are traded at 10,000 is recommended, as opposed to the standard Forex account, in which lot prizes are traded at 100,000. Once you’ve opened your account, you now have to arm yourself with knowledge in foreign currency trading lingo. Find out what a PIPS stand for and other items on the agenda. It doesn’t stop at learning the lingo. If you want to be excellent at currency trading, you have to learn to read the charts, be informed of international current affairs, and alerted in the rise and fall of interest rates around the world. There are so many factors that contribute to the value of one currency, so you have to practice intuition, as well as logical and technical data analysis. Now all you have to do is download software that will allow you to trade. To avoid paying brokers (they can charge a lot), try downloading freeware. You can switch to a standard Forex account once you’ve improved your foreign currency trading skills and bought more confidence.

Forex currency trading is one of the most lucrative businesses you can get into these days. When the worries of financial turmoil loom just around the corner, it is excellent to have an extra source of income you can turn to. Forex currency trading is one of the fall backs you can count on if you have the right knowledge to back you up. Just as it is with any other business, forex trading success comes from hard work and the patience to learn and familiarize yourself with its ins and outs. Forex currency trading is lucrative but it is also tough especially for beginners. You have to be aware of its processes and gather enough information to help you come up with your own trading system. The currency trading game is a quick paced one and you always have to be flexible enough to keep up with the demands and the shifting preferences of buyers and sellers. Forex Currency Trading’s Basics Before anything else, you might as just want to question – what is this forex currency trading thing anyway? This business works through a buy and sell process of various currencies. Players operating in this business game rely on exchange rates to know if it’s a excellent or terrible time to sell their specific currencies. As you know, monetary currencies differ from each other in terms of amount but all of them are interconnected with each other. For example, a drop in the US dollar currency may mean a notable increase in euros or vice versa. When you engage in forex currency trading, you do both the buying and selling of currencies. For example, you may buy euros under the price of US dollars. In essence you are selling the dollars to your business partner as you are buying his share of euros. This is also the reason why forex is also known as Foreign Exchange because there is mutual interaction between the participating business parties. The Popularity of Forex Currency Trading One of the reasons why it has become well loved is because it offers safe and quick transactions. Regardless of the income that this business brings, people need to exchange currencies especially when visiting another country or when buying vital items overseas. This secures the parties involved because it uses the exact exchange rate applied for each monetary value. Eventually, forex currency trading became well loved because of its volatile nature. Currencies never really stay in their current amount. Its rise and drop is dependent on a lot of factors which makes it an exciting and promising field. Anything can happen, which is why most of the forex players have their own tracking system to effectively scout the forex market for excellent buys. It also does not take much capital to make it a lucrative business. The vital thing to have is a keen eye on the market paired with excellent intuition and some sense of foresight. You need to have a constant feel of the market when it comes to forex currency trading.

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Foreign Currency Trading is all about buying and selling different currency on the forex market.   It has everything to do with exchanging currencies one for another amongst different currencies in the world, which provides liquidity and accessibility to the traders. In this market, exchange of currencies takes place on daily basis. In the  exchange process, large number of currencies will be exchanged by the members and other traders with fluctuations of market price. The best way to enter the world of Foreign Currency Trading is by utilizing one of the best software available on the internet today.   There are number of different Foreign Currency Trading programs available today.   These software applications are made to provide wide selection of services to the customer, traders and participants. Some of the largest customers are commercial banks, central banks, investment banks, brokers etc. These software applications are designed to help not only those large corporations and brokers, but also individuals who are looking to make a excellent living. Most well loved software in Forex market are forex autopilots. I have done extensive research about many different automated robots, and came up with a list of top three applications.   Please visit forexautopilots. org for a list of top three Trading Robots. Since the main purpose of Foreign Currency Trading market is buying and selling different currencies, more countries are coming forward to exchange their currency for another. The entry of any currency is free and any number of countries can enter the forex exchange market by buying and selling world currencies. Nowadays, currency market becomes the general and common market for more buyers and sellers to buy and sell at a profit. Trading in a Foreign Currency Trading market helps the buyer and seller to come up with lucrative currencies and profits for those currencies. Sometimes, the Forex may find fluctuations for many currencies listed with respect to political and economic condition of the forex currency in the market.   The main reason for the establishment of the Forex System is to have a uniform rate for the currency listed in the market. Foreign Trading is very similar to stock market, only it takes place with respect to the currencies. With more customers and traders, this market serves the purpose for which it is established and offers better opportunity to come up with different and more forex currencies as per their requirement.

What is currency trading? Well, at its simplest it is exchanging one currency for another, just as you might do when going on vacation to another country. You trade your own currency for the currency of the country you are visiting. But, when people talk about forex (foreign exchange) trading or currency trading on the forex market, they generally mean something very different. In this case traders are constantly exchanging one currency for another (buying currencies and selling others) with the aim of making a profit when the exchange rates change. It is a small like trading in stocks on the stock market. Stock traders usually buy and sell stocks very quickly compared with the average personal investor who will take the advice of a broker but often keep stocks for years or even decades. How Does Currency Trading Work?The best way to demonstrate how currency trading makes money for the traders is to use an example. Let’s say the current rate on the British pound to euro forex market is this: GBP/EUR 1. 1200. That means that to buy one British pound you will need 1. 12 euros. If you believed that the value of the euro was going to rise compared to the value of the pound, you might sell 100,000 pounds, buy 100,000 euros, and wait. Then let’s say a few days later, the exchange rate has went to: GBP/EUR 1. 0600. Sure enough, the pound is now worth only 1. 06 euros. Now if you sell your euros and buy back 100,000 pounds, you will have made a profit of 6% of your investment, less any fees. This sounds like a huge amount of money. Who has 100,000 pounds or even dollars lying around in the bank to trade with? Not me, and I guess not you either. But fortunately, you do not have to have all that money for real. You are buying and selling at the same time, so all you need to have is enough to cover any loss that might be made before you could exit the market if your prediction was incorrect and the currency that you bought started to fall. Your broker loans you the rest. This is called trading margins. On a $100,000 trade the margin is usually 1% or 2%, i. e. $1,000 or $2,000. This is the money that you must have in your forex brokerage account. The amount you trade is determined by ‘lots’. A lot may be worth $10,000 or more depending on the currency and the broker. So if you want to trade $20,000 you would trade 2 lots and so on. There are now limited risk accounts, where you can only risk the amount of cash you have on account with the broker, thus avoiding margin calls. This is done by allowing smaller players to trade forex using ‘mini lots’ or fractions of a lot. So you can trade $1,000 by trading 0. 10 of a lot. This reduces risk but may cost more to trade. More and more ordinary people are getting into currency trading these days. It has certain advantages over the stock market and even if you know nothing about valuation of the different currencies you can set up a forex robot, a complex software program that will trade for you according to the settings you choose. Keep in mind that it is a risky business and money can be lost as well as gained. Knowing what is currency trading gives you an thought of whether you want to take the next step towards becoming a currency trader.

As a new currency trader, one of the questions you might have when you start looking at this market is what am I really buying or selling?’ The small answer to this question is nothing! The retail FX (FX =Forex= foreign exchange=currency) market is a purely speculative one and no physical exchange of currencies ever takes place. All trades exist simply as computer entries and are netted out depending on market prices. The reason the market is in existence is to allow large companies and financial institutions to trade huge amounts of currency easily. These constitute approximately 20% of transactions. The remainder is speculators like you and I simply trading on rate movements! You must also appreciate that the market is unregulated – it regulates itself!

The leverage that is offered in the currency markets is extremely high for the simple reason that if you traded with real money, most traders would not have enough cash to allow sensible trades to be made. The smallest movement is a ‘pip’ and on an amount of 1000 US dollars, a 1 pip movement would yield 10cents profit (or loss). Now bear in mind that a 100 pip movement in a day is a reasonable size go, so you could stand to make 10$ on the day. This hardly sets the pulses racing!

In order to overcome this problem the currency brokers offer leverage to allow you to trade at meaningful levels. These vary from 1:50 up to a suicidal 1:400 which means that for 1000 USD in your account you could trade 400,000 USD in the market (this is equivalent to $40 per pip movement) so for a 100 pip movement in the incorrect direction, you would have lost 4,000 USD. With only 1000 USD in your account you would have received a margin call or been closed out by the broker – not terrible for one day’s trading!! This is why currency trading is such high risk and only for experienced traders.

One of the unique aspects of the currency market, is that we do not have any volume to help us in our chart reading, so your candlestick analysis has to be brilliant, as you will need to forecast price movement purely from the candles themselves.

Now – a quick lesson in currencies. All major currencies are traded as a pair such as GBP/USD or EUR/GBP. Each currency pair has its own chart and as you would expect there is a spread between the two currencies. This varies from broker to broker, as does the leverage. Another unique aspect of currency trading is there is no commission! Suppose you reckon the GBP/USD pair is moving up in price (the dollar is weakening against the pound), then you might choose to go long the UK pound. In buying the pound you are automatically selling the dollar. Every pair has a ‘pip’ quoted price – this is normally 2, 3 or four decimal places depending on the currency. For each pip movement you would gain or lose 1USD. If you wanted to sell(or small ) the GBP/USD you would sell one contract instead. It really is this simple. Naturally there are other aspects to consider such as fundamental data, etc. but in essence that is really it.

Unfortunately, this simplicity belies the risks and dangers involved thanks to the leverage required to make a meaningful trade size. Just as in online poker, it is very simple to open an account and to start. The typical cycle goes something like this – new trader rushes in full of confidence and optimism with small amount of money – opens large position with huge leverage and is wiped out very quickly. Having learnt lesson one, they then return some time later, with a larger fund and trade much smaller size lots ( contract sizes ) until they have built up experience. They may or may not succeed. I did much the same myself, but was lucky. I rushed in and opened six positions all of 10 contract size. I was therefore trading 600,000 USD in a world market running to trillions, with no previous experience and no plot. In a few hours I was 2,500 dollars negative. I sat up all night and watched the positions go ever lower through Asian trading. Quite why I sat up all night I have no thought – I probably thought I could influence the direction by the power of positive thought! To cut a long tale small I managed to close out at a profit of a few hundred dollars the following day. I was lucky – you will probably not be so fortunate. If and when you come to this market, please learn from the above. The main reason most people fail at currency trading is from under-funding. Because you can start with a very small amount of money( and trade large quantities) this is what most people do – they quickly lose their money. The only reason I survived was because I had over 10,000 dollars in my account. In my opinion the minimum you should start with is $5,000 dollars and preferably $10,000

All brokers offer a demo account for you to practice your trading skills. But, I do not believe they add any value whatsoever. It is only when you start trading with real money, no matter how small, that you start to learn and develop your trading style.

Considered as the largest trading market on earth, currency trading is pegged to be trading over USD 2 trillion everyday. This figure greatly dwarfs the performance of the New York Stock Exchange, which gathers an estimated USD 50 billion each day. This comparison alone while help you imagine just how huge a business currency trading is. Before anything else, you might be prompted to question, “What is currency trading?” Also known as Foreign Exchange, Forex, or FX, currency trading attracts a lot of investors in that it is a very liquid market to invest in. The potential for profit is huge but the risks too, are very high. Unlike the stock exchange, forex accumulates a huge volume of traders. The margins may be low, but the significantly huge number of traders makes up for it. In effect, when you profit, and you invested a significant amount, you’d cash in on a very high profit. What is currency trading to some investors who can afford to lose is such a huge risk to those who aren’t too fluent about the business yet. A nation’s currency has a value in relation to another currency. As one buys and sells currency, one finds out that there are pairs of currencies that get traded 85% of total volume: US Dollar (USD) and Japanese Yen (JPY), Euro (EUR) and USD, USD and Swiss Franc (CHF), USD and Canadian Dollar (CAD), Australian Dollar (AUD) and USD, and British Pound (GBP) and USD. Why do currencies fluctuate now and then? Current values fluctuate due to its movement. Simply place, when one is in a foreign country and wishes to shop, he will have to convert his native currency to the currency of the country where he is. When he goes back home, he will then have to convert any remaining foreign currency in his pocket back to his domestic currency. Another reason why there is constant fluctuation in currency values is speculation. Investors, who speculate about how strong or weak a currency will perform at a given time, buy or sell currencies accordingly. Drastic buying or selling has significant impact in a nation’s economy. What is currency trading against stock exchange? Stock exchange is another business that attracts huge volumes of business but forex is much larger. Aside from the volume here are some advantages of currency trading over stock exchange. • There are no commissions to pay since you only pay the bid or question spreads. • Trading business is done 24 hours a day, 5 days a week so you can trade when you want to. • There is more focus on what currencies to trade as compared to over 5000 stocks to choose from. • Forex is now open to every one and there is no need to have so much money before one can start trading. • Internet not allows online currency trading so forex is no longer just for large banks, or huge businesses. Now that you have some thought what is currency trading, you can start considering if this is a business you’d like to venture in soon. There are a lot more to forex so it is best that you continue doing some more research about it so you can start trading properly.