Forex Trading

October 14, 2006 8:33pm CST
what is forex trading..?
4 responses
@bhchy1 (6050)
• United States
15 Oct 06
Sorry...never heard of it...any clues you can give us?
• Indonesia
15 Oct 06
how with valas online
@Zerzis (557)
• India
14 Apr 07
try someone told me that it teaches us basic things about forex market and how to trade profiatably in it...
@srkool (1012)
• India
26 Nov 06
no idea
• Singapore
26 Nov 06
Forex trading is basically trading the world’s currencies. It is traded in pairs, such as EURO / US Dollar (EURUSD), US Dollar / Japanese Yen (USDJPY), etc. The first currency in the pair is the base currency which is the basis for buying and selling, while the second is the counter or quote currency. Eg. EURUSD quote at 1.2833 means 1 EURO is worth US$1.2833, and USDJPY at 117.55 means US$1 is worth 117.55 Japanese Yen. The idea is to buy one currency while selling the other. So, if we expect the US economy to be strong and EURO to weaken against USD, we will execute a SELL of EURUSD. By doing this, we have sold EURO and bought USD, with the anticipation that USD will appreciate while EURO will depreciate. There is no centralized location for forex trading, hence, it starts when Australia market opens on Monday morning and stops when New York closes at the end of Friday. It is effectively a 24 hour a day market. This is one of the benefits as there are always ready buyers and sellers, thus, boosting liquidity. Other benefits include zero-commission trading offered by most brokers and given that we are trading on a country’s staple of life, it is unlikely for currency to fold overnight. Trading skill requirement takes into consideration of fundamental and technical aspect of the currency. Fundamentals such as interest rate changes and economic news are key indicators of the currency value. Technical analysis includes charts, indicators such as Stochastic, RSI, MACD and many more. As there are so many factors to consider while trading, that explains why trading forex is not easy and takes time for any individual to build up the right skills set to trade successfully.