Even with the volatile stock market of 2009 there is still a lot of interest in forex daytrading. Many would-be investors want to learn how to trade currencies online because of the versatility of learning how to trade currency in an online course. Many want to learn forex trading to eventually pursue this business model full-time.
Online trading in the forex market is the same as trading in the stock market or in commodities. A day trader buys currency at a low price and then sells it at a higher price. For example, the Canadian dollar is worth 75 cents in US dollars. You would purchase as much Canadian dollar as you can while speculating that the Canadian dollar will increase in value. When it does, you trade your Canadian dollars for American dollars and make a profit.
After you learn the forex market by taking a course or by conducting currency trading research, you become a beginner trader. You can begin online trading with just a computer and an Internet connection.
Currency trades are conducted in pairs such as EURO/USD (Europe/US Dollar), JPY/USD (Japanese Yen/US Dollar), and many other world currency combinations.
Many beginners start their careers with the help of brokers who are well versed in trades. These brokers buy large quantities of units and break them down into smaller units to sell to individual investors. It was impossible for the individual investor to trade in forex before brokers began selling smaller units because of the amount of money a trader needed to have to enter the market. It’s now possible to start with as little as $100 to $1000.
The forex market is accessible 24 hours per day, six days per week from anywhere in the world. The market opens in Sydney, then in London, and finally in the United States each day. A trader has access to the market by a phone call to his broker, but most trade currencies online.
Currency traders spend most of their time looking for economic and other indicators in order to evaluate currency pairs and buy or trade to make a profit. The most serious traders use software to help in their analysis. Software has been developed to make accurate reports to the investor on fluctuations in currency pairs. The software can even indicate which pairs to buy or sell based on past performance and current indicators. The traders making the most money would not be without their software.
It is a good idea to learn how to read forex quotes. A forex quote gives the value of a currency in relation to another currency. For example, if you are trading the Japanese yen (JPY) and the US dollar (USD) and you want to know the value of the Japanese yen, the quote would be:
USD/JPY=119.50
The US dollar is the base currency and left of the slash while the Japanese yen is after the slash and called the quote. The base currency is always one unit or $1.00. That means it takes 119.50 yen to equal $1.00. Learning to read quotes is a good tool even when using software.
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