Thursday, October 25, 2012

An Excellent Forex Education Tool

In this article you will get a currency trading tutorial that has been compiled based on my theoretical knowledge and practical experience in forex trading.
Currency trading is an excellent opportunity to make money almost by anyone. However to be a successful trader and actually make profits you need to understand the basics of currency trading to begin with. Forex education will provide very useful guidance to novice traders.
Some of the basics of forex are:
o Forex market where currency trading happens is an electronic over the counter market (OTC). World currencies are traded 24 hours a day, five and a half days a week. The usual means of trading forex are Spot, futures and forward
o Various currencies are "priced" in pairs with price being quoted either indirectly or directly.
o All currencies have two prices - the Bid Price and the Ask price. Bid price is the price at which the market will buy the quote currency in relation to the base currency. Bid price is always lower than the ask price. Ask price denotes the amount at which one unit of the base currency can be sold in forex market in relation to the quote currency.
o Currency trading market is the largest financial market in terms of both size and liquidity. The participants in this market are large banks, commercial companies, hedge funds, investing firms, brokers, trading firms and the individual traders.
Let us now understand how a typical currency trading transaction happens. Based on news that employment numbers are increasing in the United States, one can safely predict an increased demand for U S dollars.  A forex trader will thus immediately enter into a currency trade transaction which involves selling British pounds and buying U S dollars. As the demand for U S dollar goes up, the elasticity of market will dictate that the price too goes up. Trading in dollars would intensify and by the end of the day U S dollar would have appreciated and become much stronger. Thus the trader will book profits in the deal which he entered at the beginning of the day.
If you are serious about making money by trading forex you can educate yourself by enrolling in currency trading tutorial courses. There are a number of free forex training courses available online too which you can make use of.
Forex market trading is no longer the domain of large institutions alone. Ordinary people like you and me can easily learn the basics of forex trading education and start trading profitably in the market.

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