Forex News
Forex Articles
Forex Daily Outlook
Forex Weekly Outlook
Trading Platforms & Tools
Other Resourses


Sign Up to get the FREE
Forex Start Report.

The Beginners Guide ToCurrency Trading

Your email is
safe with us...



Forex News Summary xml




home contact site map

Forex currency trading basics: will you be a bull or a bear

By Terry Till

Forex currency trading is booming around the world and is quickly becoming the preferred choice of many online and offline investors, but what is Forex and how can you get involved in this attractive new investment arena.

First of all lets explain what Forex actual stands for and what it involves.

Forex stands for Foreign Exchange and is the trading of one currency value at a given time in relation to another currency value, so you are trading in the market of money or cash.

The Forex market is also known as the bull market or spot market.

Similar to trading stocks where you buy a particular stock at a given price and then anticipate the value of that stock increasing in value so you can realise a profit on your investment, traders in the Forex buy and sell units of currency.

A unit of currency that you intend to trade in is called a "lot" and is equivalent to $10,000 in a mini traders account and $100,000 in a standard or 100k account.

When trading currencies you are required to open an account with the Forex broker and make an initial deposit into what is called a margin account, this is because you do not actually pay instantly for the full cash value of your currency but do deals by use a leverage of multiplication on the money you invest.

Movement of a currency value is measured in units called pips, for instance if the value of the British Pound against the Dollar was 1.8720 and it moved in the Forex market to a value of 1.8721 this would be a one pip movement.

A mini traders account usually works on a leverage of 10 to 1, whereas a standard traders account works on a leverage of 100 to 1, meaning that on a mini traders account for each pip move on your currency lot either upwards or downwards you would be either making a $1 profit or losing a $1 off your account balance.

In a standard account this same one pip movement would be either making you a $10 profit or a $10 loss.

The mini traders account is ideally suited for new or novice traders who want to try the Forex market and see if its investment potential is suitable for them.

An interesting aspect of the Forex market is that not only can you buy a lot of currency expecting it to rise in value but you can also sell a lot of currency first with the belief that it may fall in value, and as such you can then buy the equivalent to close the trade and realise a profit.

It should be realised that dealing in the Forex market is an investment strategy and markets can move violently in either direction, this gives the opportunity to make money but conversely you should be aware that you could lose money without proper Forex trading education and preparing a strict and sensible strategy.

Copyright 2006 Terry Till

Forex can be exciting and profitable, find out how to get started at:

Webmasters and ezine owners may use this article provided they leave
all content and links in full contact and without alteration.


Do you have a comment or something to add to the above article ? Please do so here.
We hate SPAM, all atempts will be reported

Confirm image:

Forex Related Articles

  • A Look at Online Forex Brokers
    An online forex broker is a firm that facilitates retail trading using Internet technologies. Global Forex Trading (GFT), one of the popular online forex brokers. It provides retail traders with a free...
  • A Guide to Forex Trading System
    Without the doubt the biggest market in the world, the Foreign exchange market is so huge that on a normal day it can average almost USD 2 trillion. Not even all the stock and bond markets of the entire...
  • The Biggest Secret to Successful Currency Trading
    Successful currency trading looks deceptively simple, yet few traders succeed - despite the fact that there is plenty of material around to show them how. So why is this? - The fact is, much of the conventional...
  • What Is A Mini Forex Account?
    Nowadays many people around the world is looking for entering the world of Forex trading due to its very high profitability potential and many other advantages the Forex market has over other capital markets.But...

AccountForex © copyright 2006 | Privacy www.accountforex.com