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Brief introduction to Forex Trading

 

If you think back to your last international vacation, you will remember that you had to exchange currency so that you could buy goods and services in the foreign country. These exchange rates change frequently, and depending on where you make the transaction, you could be ripped off!

Forex traders take advantage of the continuing change in exchange rates to find ways to profit from the movement. It’s not difficult to get started, though you’ll need to learn some jargon initially. The Forex markets are fast-paced, and the concept is to make quick profits from small changes in the exchange rates. Due to the leverage and quick action, there is significant riak in Forex trading. So be sure to trade with capital that you can afford to lose. Especially in the beginning, your odds of losing are higher.

forex trading
Rather than exchanging money for foreign currency as you did on vacation, traders need to open an account at a Forex broker. The concept is similar to trading commodities, in that you invest a certain amount of capital to start, and that is used to leverage trades of much higher values. Forex trading is international, and trading continues almost 24 hours a day. You can place orders to be executed overnight, while you are asleep if you wish.

To identify each currency, 3-letter codes, or abbreviations are used. USD would be US Dollars, and CAD is Canadian dollars, EUR is for Euros etc. The rate between two international currencies is always represented in pairs. So EUR/USD is the rate of exchange between the Euro and the US dollar.

You should begin by researching brokerages online, review their account requirements, and also their reputation. There are many rules and regulations, to you will have a lot of studying to do! Join online forums to discuss these issues with other traders, and to get answers to your questions. You can also get opinions on the many brokers that way.

Some traders prefer to make their own trading decisions, and others try to trade with automated robots. Whichever method you choose will depend on your own circumstances, and your personality. There is a lot off opportunity as well as risk in Forex trading, so start slowly and study every aspect carefully!

Further research;
Basics of Forex
5 Steps To Chose A Forex Broker
Foreign Exchange Market – Wikipedia

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