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What is forex trading

By Dean Watt

Before we look at trading we need to understand what forex means. Forex is short for foreign exchange and is about currency (money) exchange. All countries have a currency and this can be exchanged for another countries currency.

When a currency is exchanged for another we receive a certain amount of currency in return. How much we get depends on the exchange rate. This exchange rate changes overtime depending on the strength or weakness of the countries involved. This is the open forex market at work.

It is this movement that allows us to make money from trading. Because the forex market is a dynamic system it is always moving and is made up of all the market participants. When forex traders make buys the market goes up. When they make sells the market will go down.

Who is involved in the market. It is everyone who needs to exchange money . It is investment banks, insurance companies to big business hedging currency fluctuations, all the way to the individual who trade to make money.

Traders can trade in different ways and this can be either fundamental trading or technical trading. Both of these ways are valid and will make money. To make money we need to choose the way that suits us the best.

When we trade with a fundamental approach we are looking at the macro or big picture. This means we use economic reports to determine our trades. This could be one country becoming economically weaker compared to another.

Technical traders are not interested in the fundamentals of trading all they wish to do is trade the price patterns on their charts. When done correctly this type of trading can make consistent returns.

Whatever way you wish to trade we must find the way that works for you. Only then can we make sure that you are maximize your potential to make money.

for more information about forex trading visitforex trading tutorial or how to make profits from currency exchange

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Topics: Currency Trading | Comments Off

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Article Citation
MLA Style Citation:
Watt, Dean "What is forex trading." What is forex trading. 10 Apr. 2013. uberarticles.com. 17 Nov 2014 <http://uberarticles.com/finance/currency-trading/what-is-forex-trading-5/>.

APA Style Citation:
Watt, D (2013, April 10). What is forex trading. Retrieved November 17, 2014, from http://uberarticles.com/finance/currency-trading/what-is-forex-trading-5/

Chicago Style Citation:
Watt, Dean "What is forex trading" uberarticles.com. http://uberarticles.com/finance/currency-trading/what-is-forex-trading-5/


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