Simple Steps for a Profitable Trading HTML version
I would like to personally welcome you to the fascinating world of Forex trading. If
you’ve been involved in the investment world for any length of time, I’m sure you’ve heard the
term Forex thrown around, but what exactly is Forex?
Forex stands for FOReign EXchange. In the simplest of definitions, it is the simultaneous
buying and selling of a currency pair (e.g. EUR/USD), hence the term currency trading. It is a
continuous physical occurrence taking place in the global economic system.
For example, when a tourist travels from Europe to the USA and exchanges euros for
dollars, he becomes a potential trader of Forex. Similarly, when a US company needs to exchange
dollars before exporting goods to Europe or Japan, it too takes an active role in the foreign
With this in mind, every currency pair has a price which is determined by the law of supply
and demand, globally. If the demand for a particular currency is high then it gains value.
Conversely, if a currency is in abundant supply, its value declines.
Currently, Forex is the most liquid of all markets with trading volumes surpassing the 3
trillion dollar mark, every single day. To put things in perspective, this is more than the NYSE and
the NASDAQ combined!
Until recently, currency trading was confined to banks and large financial institutions.
However, since the advent of the internet, many OTC brokerage firms have sprung up allowing the
everyday trader, or speculator, to actively participate in this market.
Due to its large trading volumes, Forex has become a very popular investing opportunity.
The potential for profit is enormous, but as with anything involving large gains, the risks are
equally amplified. This is what makes this type of investment so attractive to some, whereas others