The Forex (also referred to as FX) stands for FOReign EXchange (currency trading) and is Over the Counter (OTC) market. The Forex market is the largest and most liquid financial market in the world participated in by a huge volume of traders who buy and sell currencies. Daily currency trading transactions amount to more than US$5 trillion, a far cry from the combined volume of transactions in equity markets at only US$30 billion.
Previously, participation was only limited to banks, hedge funds and major currency dealers. But with the persistence of small financial institutions and the advent of the internet, the foreign exchange market has allowed the trading of currencies at the retail level. With the internet and the development of various proprietary software, numerous interested traders around the globe can now take part in the Forex market. |
For trading, you need to understand Forex very well and the basic question that you must know the answer to is how much you are willing to risk and if you can bear the losses too.
Though there are numerous myths about how Forex traders become billionaires, there is very little truth to it. The reality is completely different. There are many times, when you will be at a loss too. With a few basic rules under your belt, you can learn how to trade Forex. Rule 1 - Learn how to read the charts The charts show the trend of the market. They will show you the where to enter and when to exit. Many a good trader has made profits following these charts and not by investing according to his or her intuition. There is no place of intuition in currency trading simply because this is not a speculation but rather a well-planned strategy. While you are making profits while following the trends, these trends will also help you to reduce the losses. |