It’s interesting how many people ask me what is forex trading. Almost every time someone asks me what I do and I tell them I trade the forex market, this question inevitably comes up.
Below I’ve put together a few question and answers that are most commonly asked to help you understand a little more about what is forex trading, what it involves and what are the pros and cons of this opportunity.
The answer is simple really- it is the acronym for Foreign Exchange Trading.
What does forex trading involve?
It involves trading currencies of different countries around the world. What this means is that you exchange one foreign currency for another, and as with any investment opportunity, to make a profit with it you have to buy low and sell high.
Why choose to trade foreign exchange instead of futures or equities?
There is actually tremendous potential in forex trading, which is what makes it such a huge draw for millions of people around the world. It also offers a host of advantages over speculative trading in stocks, futures and other equities.
What affects the rate of the various currencies?
You’ll be surprised at the answer. Just about anything can affect the currency rates for the day. It could be a global incident that occurred half way across the world or a totally unexpected incident that happened in your neighborhood. You never can tell and that only adds to the allure of forex trading.
Can you trade in any currency?
that’s not what it means. A major percentage of trading is done in
those few currencies but there are several brokerages that offer wider
trading opportunities in the less commonly traded currencies.
This is among the most important things you need to know before entering this volatile market.
Forex trading can be overwhelming when you are just starting out but with a little bit of help you’ll be fine in no time at all. As with anything preparation and a lot practice using dummy accounts, watching tutorials and doing your due diligence is the best way to start, while minimizing risk.
I’d be happy to help in any way I can. Contact me and I’ll get back to you as soon as possible and please do visit our other related pages below on: