Forex Trading Introduction Tutorial

The Forex currency market is a non-centralized exchange where banks, businesses, governments, investors and traders can trade currencies with one another. By "non-centralized" I mean there is no actual physical centralized exchange like the New York Stock Exchange or the Chicago Mercantile Exchange. Instead, trading is conducted "over the counter", which basically just means it's done without the aid of a central or physical exchange. The Forex currency market is also referred to as the ‘Fx market', the ‘Currency market', the ‘Foreign exchange currency', or simply as Forex.

What is Forex Trading?

FOREX trading involves trading currencies from different countries against each other. Essentially, you are speculating on the direction of the price of one currency relative to another currency. For example, if you think the British pound is going to rise against the U.S. dollar, you would buy the GBP/USD currency pair. When you buy the GBP/USD, you are selling U.S. dollars and buying British pounds at the same time, if the British pound strengthens relative to the U.S. dollar it will make the GBP/USD pair go up and you would make a profit. If you bought the U.S. dollar against the British pound, and the GBP/USD went up still, you would lose money because the dollars you bought lost value relative to the pound.

As FOREX traders, we can learn to trade the Forex market by learning an effective trading strategy to spot high-probability entries into the market. This gives us an "edge" to trade the market with that we can profit from if we let it play out over a large series of trades. There are other reasons that people would make transactions in the Forex market too, such as to exchange currency to that of a different country while traveling. Banks and businesses also frequently use the Foreign exchange currency market to facilitate international business, and governments use it to regulate the strength of their currency relative to that of another country.

Forex Market Hours

The Forex market is open 24 hours a day, 5.5 days a week. The heaviest trading centers are located in London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney. One of the great things about forex trading is that the market is open from about 5pm local time on Sunday to about 4:30pm local time on Friday; you can trade whenever you want during these hours. This means more opportunities and more flexibility with your daily schedule.

How can YOU participate in the Forex market?

You are probably reading this article because you are interested in retail FOREX trading; this means you are looking to profit by buying and selling currencies in the Forex market. You will need to first learn an effective trading strategy; this will provide you with your edge, which you will then use to spot high-probability entries into the market. You will then need to create a Forextrading plan around your chosen strategy; this will give you a guide to follow so that you don't end up gambling and trading emotionally. There's a lot more to becoming a successful trader than that, but you have a good idea now of how to get started. Also, remember that risk management in forex trading is key; never risk more than you are prepared to lose per trade. Posted by Forex articles and reviews online.