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Thursday, November 6, 2008

Introduction to Forex Trading - The Basics

By Sangeeth R

The Currency Trading (Forex, FX,Foreign Exchange) market is the most popular and the fastest growing market on earth. It is believed that it is one of the best ways to earn money from home or from online. Though it has risks involved, Forex trading is the most desirable money making methods, especially men love this currency trading.

What is Forex Trading?
It is very easy. We trade currency to make money. How? by buying it at a low price and selling them at a high price. The simple logic of business. The best part of Forex trading is that you need not actually buy the currency (Physically) as we do in stock market. We trade currency.

How to make profit with Forex trading?
This is the major question and the main reason for anyone to trade forex. PROFIT is what we all look for in anything we do. Forex trading is no exception. What is profit in terms of Forex? It is the difference in the currency rate with which we buy and sell the currency pair. For example, take the currency pair EUR/USD. If you buy 1 EUR for 1.2980 USD and sell it when 1 EUR is more than 1.2980 USD, you make a profit.

What are the currencies that are traded in Forex market?
The most popular currencies that are traded are

United States Dollar - USD - Also called Buck

Euro members Euro -EUR - Also called Fiber

Japanese Yen - JPY -

British Pound - GBP - Also called Cable

Switzerland Franc - CHF -Also called Swissy

Canada Dollar - CAD - Also called Loonie

Australia Dollar -AUD - Also called Aussie

New Zealand Dollar - NZD - Also called Kiwi

These currencies are called Major currencies and there are other Minor currencies that are traded in Forex market too.

When to trade these currencies?
Though the forex market is open 24 hours from Sunday evening to Friday afternoon EST, strategists have derived the best times to trade currencies. For example if your trading USD when the United States is sleeping, you will not see immediate results. It is suggested that you trade currency according to the local time.

New York Market : 8 am - 4 pm EST

London Market : 2 am - 12 noon EST

Great Britain Market : 3 am - 11 am EST

Tokyo Market : 8 pm - 4 am EST

Australian Market : 7 pm - 3 pm EST

Risks involved in trading forex
Any Forex trading source will let you know that there are high risks involved in trading forex as it is mostly speculation. You have to have the control over your money. After all it is hard earned. Just be careful that you do not get carried away by this trading process. More is always less! Keep that in mind. Do not become Jealous or Greedy. Understand the system thoroughly before starting to trade. There are many demo account providers who help you to practice first before starting the real forex trading.

Conclusion
Forex trading is not a get rich quick/fast scheme. It is real money that is traded and you need to work hard for it. Do your analysis properly and make decisions which are suitable for you and your financial situation. Learn before you teach. It is a highly volatile market and think twice before entering this financial world.


Iam Sangeeth Raghunathan. I am a software engineer who is now a full time homemaker. I love blogging,crocheting and cooking. My Food Blog helps and tries to inspire people to cook .

I have started Forex Blog to share my learning with others. Do join me and you won't be disappointed.

1 comment:

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