Forex Trading for Beginners

Forex Trading for Beginners

Mankind has been trading in some form for its entire existence. Trading began as bartering, where a basket full of nuts would be traded for a couple of chickens, and slowly grew into a cash based trading process that we're all familiar with, where we now trade our products or services for cash and use the cash to trade for, or purchase, the goods and services we require.
And with the creation of the internet, trading has gone online in a seemingly cashless world of PayPal, credit and online trading, where you can trade almost anything including forex.

Forex stands for foreign exchange, and is essentially the trade of different currencies of money. It's similar to when you travel overseas. You buy some money in the currency of the country you're travelling to, and when you return home you use any left over money in this currency to buy your home currency again.

If you've ever done this, you'll understand that there is an exchange rate, such as $1 in US currency equals $0.80 in Australian currency, and that this exchange rate varies from day to day. Depending on what the exchange rate is doing when you travel, you can either make or lose a little money in this transaction. You'll also realize that the place where you exchange your currencies, called a broker, will take a small cut of the transaction as payment.

Now all Forex trading does is buy and sell different international currencies for the purpose of making money, rather than travel. It's a simple concept, but actually quite a complex activity as you need to be able to buy currencies and then sell them for a profit to make forex trading work for you.

Forex trading is a popular form of investment because:

1. The Forex market is worth up to $3 trillion a day in trade. 2. You can trade 24 hours a day, closing only on weekends and public holidays. 3. Anyone can do it, and you only need a small investment to join in on the action. 4. You can do it from your computer at home, and with automated trading systems like robots, you don't even need to be at home to trade. 5. You can potentially earn significant income from successful trading.

But before you get excited about the promise of untold wealth from forex trading, like all forms of investment there are risks. A poorly executed forex trade can potentially lose all your money, so it's important to do your homework and never invest more than you're prepared to lose.

So if you are interested in trading the forex, it's important that you:

1. Get some training. There are many free tutorials available online, and use a demo account that doesn't use real money, until you are confident with what you're doing. 2. Try using automated systems or robots, but understand that they are not perfect and you still risk losing a lot of money with a bad robot. Do your research! 3. Never trade with more money than you can afford. 4. Learn from your mistakes and move on!

There is money to be made with forex, you just need to find the system that works for you.