What is FOREX
Abbr. "FOREX" stands for Foreign Exchange, an exchange of currencies. When a person comes to trade currencies, e.g. buy one currency and sell another one - it is called currency exchange trading, or simply known as Forex.
Because the value of each currency always on the move, it fluctuates depending on the local and global economic factors, there is always an opportunity to profit on those changes/fluctuations - it is called currency speculation.
Euro, US dollar, Swiss Frank, British Pound and Japanese Yen - these are the most traded currencies in Forex. Of course, trading is not limited to those currencies, Forex offers variety of currencies one can trade.
If to describe in simple words how individuals trade Forex it would look next way:
Forex trading in its prevailing volume is done online.
A person finds a Forex broker, opens a trading account with the broker and deposits money.
Forex broker provides to trader so called Forex trading platform - an application, a working environment, where trader buys and sells currencies, dealing online - in other words he speculates to make money on the difference of currency rates.
In Forex currencies are traded in pairs.
EUR/USD, GBP/USD, AUD/JPY, USD/CHF and so on.
The first currency in the exchange pair is referred to as the base currency and the second as the quote currency.
For example, EUR/USD exchange rate = 1.400
Here the price of the Euro is expressed in US dollars: 1 euro = 1.400 dollars
The exchange rate tells to trader how much of the quote currency should be paid to obtain one unit of the base currency.
A Quick Overview of FOREX
FOREX is a spot market, where foreign currencies are traded - bought and sold for profit.
FOREX is a worldwide currency speculation arena with no centralized place for trading and exchange.
FOREX is a huge market with trillions dollars turnover a day and the largest investors - banks, hedge funds, investment companies and so on.
FOREX is open to individual retail investors - Forex traders - through the services of Forex brokerage companies that provide an access to the currency exchange market and take care of buying and selling orders of their clients.
FOREX is a 24 hour market that is traded every day all year round, except for holidays.
FOREX allows trading over 150 foreign currency pairs, among which the most traded are: EURUSD, GBPUSD, USDJPY, AUDUSD, USDCHF, USDCAD and GBPJPY.
FOREX trading is based on technical (price charts) and fundamental (news, economic events) analysis.
FOREX is an online stay-at-home type of business for individual investors.
FOREX is an attractive financial instrument, which can be mastered by any person with any kind of education and/or social status.
FOREX is a type of market which nowadays can also be traded by automated online expert advisors without any human intervention.
FOREX is an alternative type of investment, which unlike any other investment carries one of the largest financial risks.
FOREX is a trading arena, where in order to succeed a trader needs to learn the rules of the market, its trends, moves and behavior, and be able to apply the knowledge under real trading conditions.
FOREX is difficult to trade without a trading method - a trading strategy or system.
FOREX is a fast growing industry, and by directly dealing with money it also became
a lucrative business to various scam dealers. Novice traders should be alert about any offers in Forex which sound too good to be true.
Finally, FOREX should never be associated with quick and easy money.
More about Forex in Wikipedia.
Currency trading Tutorial at Investopedia.
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Interesting facts:
Top 10 traders according to Euromoney FX survey FX Poll 2008:
Is there a TRUE method to this maddness, or is it purely speculative.... ?
It is a speculative method in its base, however it is not build around a chaos.
In order to trade currencies effectively, one cannot rely on his/her own feelings about the market.
Forex traders use and analyse a lot of data, based on which they take decisions. Here belongs a technical analysis or simply price chart analysis, where traders review various technical indicators and studies according to own sets of rules - trading systems. Technical analysis then could be further reinforced or verified against a fundamental analysis - a study of global economy and economic figures in particular that matter for the currencies one trades.
Overall it takes a serious approach to studying the market and a good trading system to be able to analyse prices according to a firm set rules. There is no place for guessing and chaotic investing/speculating in Forex.
I blog about forex, too. I started when I started forex trading. It is interesting, but very difficult. Pity I had not found this site when he started. I am sure many here have found answers to their questions. All the best Victori
Is ther a good hardcover book that can be bought that would give step by step instructions to getting started?
For the sake of God, delete Lehman Brothers from the table... they are not with us anymore.
It says "FX Poll 2008"...
Learning FOREX is not easy as 1-2-3. Like every subject in this world you have to learn the fundamentals before even learning the complex things. For example before you can learn Algebra, you have to learn to count, then loearn addition,substraction,multiplication then division. Its the same thing with FOREX. jumping into trading will only cause losses that cannot be recovered.
I thought of forex as a child but i advice my fellow beginners nt 2 think d way i do
FROM WHERE TO GET FUNDAMENTALS OF FOREX?
If you mean fundamental analysis data: try http://www.forexfactory.com/calendar.php
For general guideline on fundamental analysis in forex try: http://www.forex-fundamental-analysis.com/