Basics of Forex Currency Trading Beginner

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Basics of Forex Currency Trading for Beginners
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Index

1. Basics Of Currency Trading
2. How Forex Works
3. Why Trade Currencies
4. Why Currency Trading Is Not For Everyone

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Basics of Currency Trading

• The term currency trading can mean different
  things.
• We discuss currency trading as buying and selling
  currency on the foreign exchange market with the
  intent to make money, often called "speculative
  forex trading".

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How Forex Works

• The currency exchange rate is the rate at which
  one currency can be exchanged for the another.
• It is always quoted in pairs like the EUR/USD
  (the Euro and the US Dollar).

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• Exchange rates fluctuate based on the economic
  factors like industrial production, inflation and
  geopolitical events.
• These factors will influence whether you buy or
  sell a currency pair.

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For Example

• The EUR/USD rate denotes the number of US Dollars
  one Euro can purchase.
• If you believe that the Euro will increase in the
  value against the US Dollar, you will buy Euros
  with the US Dollars.

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• If the exchange rate rises, you will sell the
  Euros back, earning a profit.
• Always keep in mind that the forex trading
  involves a high risk of loss.

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Why Trade Currencies?

• Forex is the world's largest market, with about
  the 3.2 trillion US dollars in daily volume and
  24-hour market action.
• Some key differences between the Forex and
  Equities markets are
• 1. Many firms don't charge commissions you pay
  only the bid/ask spreads.

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• 2. There's 24-hour trading you direct when to
  trade and how to trade.
• 3. You can trade on leverage, but this can
  magnify potential gains and losses.
• 4. You can focus on picking from the few
  currencies rather than from 5000 stocks.
• 5. Forex is accessible you dont need a lot of
  money to get started.

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Why Currency Trading Is Not For Everyone

• Trading foreign exchange on margin carries the
  high level of risk, and may not be suitable for
  everyone.
• Before deciding to trade foreign exchange, you
  should carefully consider your investment
  objectives, level of experience, and risk
  appetite.

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• Remember, you could sustain a loss of some or all
  of your initial investment, which means that you
  should not invest the money that you cannot
  afford to lose.
• If you have any doubts, it is advisable to seek
  advice from an independent financial advisor.

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Thank You