A Small Piece Of Currency Trading For Dummies
There are so many details that are important to know that an article this length cannot even begin to touch currency trading for dummies adequately. This is a broad brush stroke of some really basic information that will hopefully give you some ideas on further information that you need. Currency trading is most commonly known as Forex. Forex stands for Foreign Exchange Market. This market, unlike other stock markets, is open, active, and running twenty-four hours a day. The more that you can learn about Forex and the intricacies of trading, the more successful you will be.
Forex traders are betting on the way that exchange rates will move. This sounds easy, but exchange rates for countries are affected by multiple variables. The Forex trading arena is an even playing field, information is received by all traders at the same time. While everyone speculates on changes in the currency market, no one can know for sure when a market is going to rise or fall.
There are many environmental impacts that affect the currency exchange rates for countries. Wars, arms, changes in the economy of a country, death of leaders, etc. Just about anything that affects the people in a country affect the value of the currency in that country.
You will read a lot about "pairs" when you are learning about Forex. The USD is in all of the major pairs that are traded on Forex. When you see "pairs" alone, it is referred to USD/XX (The US dollar/Somebody else's currency). When currency is traded that does not involve the USD, it is a "cross currency pair." EUR, JPY, and GBP are the most actively traded cross currency pairs. EUR/JPY (Euro/Japanese Yen) is an example of a cross currency pair.
There are a couple of important things to know about how the pairs are shown. First, the stronger currency is traditionally listed on the left. So, when you see EUR/USD, you know that the Euro is stronger than the US dollar. This stronger currency, the one on the left, is called the "base currency." The base currency is what you buy or sell. So, if you buy 10000 EUR you are automatically selling 10000 USD.
Secondary currency or "counter currency" is the currency on the right. This currency will determine your gains or losses when you trade. For instance if you buy 100 EUR and simultaneously sell 100 USD, you have made +50. Why? Because the EUR is worth 100 and the USD is worth 50.
There are thousands of these trades taking place every minute of every day. The rates move and fluctuate very quickly. Your success as a trader depends on your ability to read market fluctuations and make trades proactively. You will find pairs that are extremely high risk and pairs that are very low risk. Knowing the how much risk you can afford to take will determine which pairs you focus on in trading.
Now, this is only one tiny little piece of what you need to know to begin trading. There are strategies, methods, and much more that will be important in making successful trades on a consistent basis. It will be important to take some classes and talk to successful traders to learn about the different strategies and methods for trading that are effective. - 23305
Forex traders are betting on the way that exchange rates will move. This sounds easy, but exchange rates for countries are affected by multiple variables. The Forex trading arena is an even playing field, information is received by all traders at the same time. While everyone speculates on changes in the currency market, no one can know for sure when a market is going to rise or fall.
There are many environmental impacts that affect the currency exchange rates for countries. Wars, arms, changes in the economy of a country, death of leaders, etc. Just about anything that affects the people in a country affect the value of the currency in that country.
You will read a lot about "pairs" when you are learning about Forex. The USD is in all of the major pairs that are traded on Forex. When you see "pairs" alone, it is referred to USD/XX (The US dollar/Somebody else's currency). When currency is traded that does not involve the USD, it is a "cross currency pair." EUR, JPY, and GBP are the most actively traded cross currency pairs. EUR/JPY (Euro/Japanese Yen) is an example of a cross currency pair.
There are a couple of important things to know about how the pairs are shown. First, the stronger currency is traditionally listed on the left. So, when you see EUR/USD, you know that the Euro is stronger than the US dollar. This stronger currency, the one on the left, is called the "base currency." The base currency is what you buy or sell. So, if you buy 10000 EUR you are automatically selling 10000 USD.
Secondary currency or "counter currency" is the currency on the right. This currency will determine your gains or losses when you trade. For instance if you buy 100 EUR and simultaneously sell 100 USD, you have made +50. Why? Because the EUR is worth 100 and the USD is worth 50.
There are thousands of these trades taking place every minute of every day. The rates move and fluctuate very quickly. Your success as a trader depends on your ability to read market fluctuations and make trades proactively. You will find pairs that are extremely high risk and pairs that are very low risk. Knowing the how much risk you can afford to take will determine which pairs you focus on in trading.
Now, this is only one tiny little piece of what you need to know to begin trading. There are strategies, methods, and much more that will be important in making successful trades on a consistent basis. It will be important to take some classes and talk to successful traders to learn about the different strategies and methods for trading that are effective. - 23305
About the Author:
If you need to make a little extra money trading currency, you may want to learn a fair bit about forex managed accounts and currency options trading. Trade with self-belief as soon as you are taught exceptional tips from the professionals!
posted by Mr. Forex at
5:42 AM
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