Introduction to Forex Trading

Posted on 14 February, 2010 under Roaming & Ramblings with Post a Comment

Since the start of 2010, I have been venturing into some unfamiliar industries to maximize my monthly income. One of them is Forex Trading, I have been meaning to give it a try for a few years now. I first learnt about Forex Trading for approximately 3 years now, Foreign Exchange or just FX are just some of the terms used to describe the trading of the world’s many currencies. What I have learned so far is that the Forex Market is the largest market in the world, with trades amounting to more than USD 3 trillion everyday.

The currency trade is the simultaneous buying of one currency and selling of another one. The currency combination used in the trade is called a cross (for example, the euro/US dollar, or the GB pound/Japanese yen.). The most commonly traded currencies are the so-called “majors” – EURUSD, USDJPY, USDCHF and GBPUSD. The most important Forex market is the spot market as it has the largest volume, it is called the spot market because of how trades are settled, which is immediately or “on the spot” in other words.

Unlike trading on the stock market, the Forex market is not conducted by a central exchange, but on the “interbank” market, which is thought of as an OTC (over the counter) market. The beauty of the FX Market is that there is no scheduled time to do it as it is a 24 hr market, The Forex market is so liquid that there are always buyers and sellers to trade with. The liquidity of this market, especially that of the major currencies, helps ensure price stability and narrow spreads. I will keep you updated as time goes by and I learn more on the subject, I am getting as much experience as possible before I start Trading. Whatever I do, I do to win not loose.

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