Basic Introduction to the Forex - Part 1

What do you need to trade on the Forex ? A high speed Internet Connection A Forex Platform (provided by your broker) A little start up Money (optional) Knowledge about the Forex Your time About the Forex Forex, or Foreign Exchange, or FX is a financial market where trading is done. Money is traded here. The Forex involves simultaneous buying of one currency and selling of another currency The Forex is a huge market and has a daily trading of $ 3 trillion which is huge even when compared to The NYSE which doesnt even trade a quarter of a trillion per day . The forex is open 24 hours a day, right from 5 pm EST Sunday to 5 pm EST Friday Currencies Traded The major currencies traded on the Forex involve the USD (United States Dollar),EUR (Euro),JPY (Japan Yen),GBP (Great Britain Pound),CHF (Switzerland Franc),CAD (Canada Dollar),AUD (Australia Dollar) and NZD (New Zealand Dollar) As it is evident, the currency is represented by 3 letters, first 2 represents the country and the last the currency name. Currencies are always traded in pairs, for example USD/EUR. The exchange rate for this pair represents how many Euro's can be purchased by 1 U.S Dollar or simply how many Euro's you need to buy 1 U.S Dollar Example USD/EUR = 1.09 You buy 100 USD anticipating the rate of the pair to rise Balance USD = 100 Euro = -109 Later when USD/EUR = 1.12 You sell 100 USD Balance USD = -100 Euro = 112 Profit = 112 - 109 = 3 Euros Imagine if you were trading more USD ?? Imagine if the price had been 1.30 instead ?? Continue to Basic Introduction to the Forex - Part 2 (Fundamentals continued) Go Back to The Forex