Learn Forex Trading

Copyright � 2008 Andrew Daigle


Capitalizing upon the buying and selling of different currencies,
the Forex market is the largest in the world, where trillions of
dollars exchange hands on a daily basis. To profit from this
powerful market, it is important to build your foundation with an
understanding of Forex basics.

Forex Trading Quotes

Before you can develop currency trading strategies, you need to
be able to read Forex quotes. Foreign exchange quotes are always
listed in pairs (i.e. USD/JPY 103.2): the first listed currency
is known as the base currency and has a constant value of 1 unit,
while the second currency is known as the counter. In this
example, USD/JPY 103.2 signifies that one US dollar will obtain
103.2 Japanese yen. When quotes are rising, it means the dollar
is increasing in value, and when they are falling, the dollar is
decreasing in value.

In Forex trading, two-sided quotes are offering encountered (i.e.
EUR/USD 1.4355/1.4360) and represent the bid and the ask price
for the currency involved. The bid is the price at which you can
sell the base currency, and the ask is the price that you can
buy. The difference is commonly referred to as the spread. In the
example above, you can buy one euro at 1.4355 US dollars or sell
one at 1.4360. The difference is how brokers manage to offer
commission-free services, as they always pocket this difference.

Trading Major Currencies

No novice should try to develop any Forex trading techniques
outside of the seven major currencies: the US dollar (USD), Euro
(EUR), Japanese yen (JPY) British pound (GBP), Swiss Franc (CHF)
Canadian dollar (CAD) and Australian dollar (AUD). Don?t attempt
Forex trading with a minor currency, as it could produce
liquidity problems for you, and you may have difficulties
selling. It is always best to trade currencies that you are
familiar with and have high volume, as this further assists in
your understanding of the strengths and weaknesses.

Forex Trading Players

Until 1998, currency trading was essentially limited to banks,
major currency dealers, and major multinational corporations. The
late 90s, the market was broken up into smaller units and became
available to the retail investor. You should be aware,
nonetheless, that if you decide to develop a currency trading
strategy, you will be pitting yourself against the largest
financial institutions in the world.

Why should I do FOREX Trading?

This market is hands down, the largest market in the world. It is
one of the few markets that trades 24 hours a day. This allows
you the opportunity to implement your currency trading strategies
at any time and from any place. The leverage in this market is
unparalleled by any other, offering huge profit potentials with
minimum capital requirements. However, it is not advisable to
partake in Forex trading without first learning currency trading
strategies, for there are no rewards without risks.

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Andrew Daigle is the creator and author of many successful
websites including ForexBoost at http://www.forexboost.com
a free forex training resource and business partners at Forex
Confidental at http://www.forex-confidential.com for trading
signals and live professional training. ============================================================


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